Summary and key messages on economic vulnerability in the Nordic countries

Key messages

Child poverty

• Ensure that families with children have secure housing conditions. This can be done, for example, by investing in more affordable housing. Insecure housing is a growing consequence of economic vulnerability and a cause of children growing up in poverty. One report showed that among families with a single mother, the most common cause of homelessness was exposure to domestic violence. Homelessness is also increasing among newly arrived families with children and parents still in the process of settling or in insecure employment.

• Make specific investments into giving children and young people access to leisure activities. Children and young people from poorer backgrounds are less likely to participate in leisure activities than others and thus often miss out on an important area for their health. Leisure activities are also important for developing a stable connection to the labour market in adult life. The proportion of young people who do not participate in leisure activities is higher among those in socio-economically disadvantaged areas, those who are foreign-born and those with disabilities. For young people with disabilities, opportunities for meaningful leisure time can be dependent on the ability to pay for assistive devices. In the Nordic region, there are concrete examples of measures to equalise unequal access to leisure activities.

Young people: similarities and differences in living conditions

• Ensure the availability of permanent jobs for young people. Many young people have temporary contracts, and the proportion is higher among girls than boys. This often means an insecure financial situation. Almost all young people think it is important that a job provides a good working environment and working conditions. Nordic research also shows that precarious employment has a negative impact on young people’s mental health. Active labour market and education programmes, including social security measures, improved working conditions and targeted health programmes are important to address this vulnerability. 
• Make long-term investments in summer jobs, especially for young people who are neither working nor studying and those in areas with socio-economic challenges. Summer jobs are many people’s first step in the labour market, but access is uneven. Among young people, a significantly higher proportion of those who are foreign-born say that they have applied for a summer job but never been accepted for one. The proportion of young people with disabilities who have had a summer job is also smaller, and a greater proportion still have never applied for a summer job. To address these inequalities, certain groups of young people may need support to access work and the important experiences and contacts that summer jobs, for example, provide.
• As education and training become increasingly focused on individual learning for the purpose of employability, there is a risk that structural differences, for example between men and women or based on social or migrant backgrounds, are concealed and continue to perpetuate negative consequences for certain social groups. Structural obstacles to the participation of women and men in working life and society risk being overlooked and thus left addressed, instead being seen only as obstacles for the individual.

Vulnerability of adults in working life

• There is clear gender segregation within the Nordic labour market. Women and men largely work in different sectors and occupations, and there are clear differences between their employment conditions and income. Women have lower wages, are more likely to work part-time and are more likely to have temporary jobs. They are also more dependent on their wages, as they have less capital on average.
• In the Nordic countries, unjustified pay differences persist based on gender, but also on ethnicity and skin colour. Structural sexism and racism need to be strongly challenged to address the economic inequalities to which the unjustified pay gap contributes.
• There is a relatively high proportion of foreign-born women who are far from the labour market. Some general explanations for this that can be identified include discrimination on the basis of gender and ethnicity, difficulties in meeting requirements for knowledge of the Nordic language, that foreign-born women receive less support than foreign-born men from relevant authorities and that the responsibility for caring for the family rests heavily on women. Ethnic gaps exist not only at the level of the labour market and entry into employment but also in terms of working conditions and wages. Foreign-born people are over-represented in jobs with precarious employment conditions and unregulated working conditions.
• Widespread illegal labour practices in the Nordic region affect workers, businesses and ultimately society as a whole. It means that many migrant workers who live and work in the Nordic region are exposed to serious economic vulnerability and are often completely excluded from welfare and other security systems. At the same time, research shows that there have been very few convictions for human trafficking of forced labour and other forms of labour exploitation in the Nordic region. Narrow notions of the ‘ideal victim’ can obscure the broader socio-economic context in which migrant workers find themselves.

Older adults and the pension gap

• The design of pension systems plays a role in the level of financial vulnerability experienced by older adults. The gender pension gap is significantly lower in Denmark and Iceland than in the other Nordic countries. The two countries both provide basic pensions to all pensioners. Non-income-based benefits help reduce the gender pension gap in all Nordic countries. There is a correlation between the level of non-income-based benefits and the number of women over 65 at risk of poverty.
• There are also significant differences in pensions between those who have immigrated to the Nordic countries and those born in the Nordic countries. In addition to the fact that foreign-born people often have fewer years to earn a pension and have lower incomes than native-born people, the most significant non-income-based benefits are only paid to people who have lived in the country for many years, resulting in lower levels of benefits for those who have immigrated to the Nordic countries in adulthood.

Economic violence

• While economic violence is a cause of economic vulnerability, economic vulnerability is also a risk factor for economic violence. Economic empowerment is therefore a source of protection against economic violence. Both these perspectives need to be considered when developing support structures for the vulnerable. Gender equality policy initiatives relating to economic equality and men’s violence against women need to be more clearly linked to counteract economic violence and its consequences.
• Welfare systems, authorities and employers must take shared responsibility for tackling the consequences of economic violence. Societal institutions need to work together to establish/maintain opportunities for economic empowerment even when economic violence occurs. Internationally, for example in the UK, there are examples of how this can be done, with social services and other relevant authorities given resources to create and develop support systems to support women and minority groups who are victims of economic violence.
• Labour laws should also address economic violence. Currently, the link between the Istanbul Convention, a European agreement to combat violence against women, and labour law is weak. At the same time, ILO Convention 190 demonstrates the need to include the issue of violence in the formulation of labour law principles. Currently, principles relating to discrimination and harassment in labour law do not include economic violence – or other forms of violence. There is a need to reform labour law in the Nordic countries to better address the reality of victims of violence, and economic violence could be included as a parameter in collective agreements in the Nordic labour market.