(Bloomberg) -- More Norwegians called in sick from work in the second quarter than at any other time in the past 15 years in what may pose a risk to the labor market and funding the welfare state.
The seasonally adjusted sickness absence rate rose to 7.1% in the second quarter, the most since 2009 when it was driven by a wave of swine flu, Statistics Norway said in a statement on Thursday. That’s higher than at any point during the height of the Covid pandemic, and the increase was seen across all industries.
As elsewhere in the Nordic region, Norway’s system of cradle-to-grave welfare, financed by high taxes, depends on keeping high levels of employment to remain sustainable. While Norway’s public finances are backstopped by a $1.7 trillion sovereign wealth fund, an expected decline of its oil and gas revenue in the coming years means budget risks are building.
Sickness and disability costs make up around 22% of Norway’s public spending, or 8% of its gross domestic product, excluding off-shore oil and shipping. The ratio is almost double that of the next biggest spender, Denmark, according to the OECD.
The Labor-led government is planning to propose changes to the system later this month, even as it has signaled that benefit levels, highlighted as “exceptional” by international organizations, are unlikely to be reduced.
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