The Nordic Model - Embracing globalization and sharing risks

%
%
80
80
60
60
40
20
0
OECD max
Finland
OECD min
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69
40
20
0
Figure 4.3
Labour force participation rate by age, 2003
Average participation rates for 5-year age groups, both sexes. The OECD max and OECD
min curves are composite indicators that depict, for each age group, the highest and lowest
participation rate over all OECD countries.
Source: OECD Labour Force Statistics.
of the population resulting from a fall in fertility and an increase
in longevity. The second may be termed the service challenge.
The services provided by the public sector include a large share
of labour-intensive human care, for which it is difficult to increase
productivity without weakening quality. For instance, the quality
of old-age care is assessed by how much time the personnel has
available per old person. Moreover, needs and requirements tend
to increase alongside other developments in society. Technology
opens up new possibilities, notably, through advances in life
sciences. Increases in material living standards give rise to new
aspiration levels; the perception of a satisfactory quality of public
provision of services is reassessed in the light of the development
of income and other spending in the society. Hence, the demand
for services may rise at the same time as they become more costly.
In the following, these two challenges are discussed in turn; in this
chapter we discuss the direct effects of demographic changes, and
in the next chapter we turn to the service challenge.
68 · The Nordic Model