In the context of rapid population ageing, giving older people better work incentives and choices is crucial to promote economic growth and improve the sustainability of public social expenditures. Therefore, the OECD Employment, Labour and Social Affairs Committee decided in 2011 to carry out a new review of policies to encourage greater labour market participation at an older age by fostering employability, job mobility and labour demand. It builds upon previous work that the OECD has conducted in this area in the Ageing and Employment Politics series and summarised in its major multi-country report, Live Longer, Work Longer, published in 2006.

As is the case with other OECD countries, Norway’s population is ageing. In line with the OECD average, the proportion of the population aged 65 and over is projected to increase from around 30% of the population aged 20-64 in 2011 to around 60% by 2050. Given the widespread ageing of society, there is an increasing need in OECD countries to further boost the employability of the working-age population over the coming decades. Norway is no exception, although that country is better placed to cope with population ageing than most other countries in several respects.

As is the case with other OECD countries, Norway’s population is ageing. In line with the OECD average, the proportion of the population aged 65 and over is projected to increase from around 30% of the population aged 20-64 in 2011 to around 60% by 2050. Nevertheless, the labour force is expected to continue to grow until 2060, since the population projections from Statistics Norway assume net immigration rates and birth rates above the OECD averages.

Norway’s population will be ageing, even if fertility is higher in that country than in many others. This chapter presents the magnitude of the demographic challenge, and enumerates recent reforms in ageing and employment policies. These reforms were implemented in response to recommendations from the 2004 OECD report Ageing and Employment Policies: Norway.

Norway is one of the few OECD countries where labour force participation rates remain relatively high up to the age of 62. This is particularly notable for men, but Norwegian females also manage to have relatively high participation rates beyond the age of 60. Growth over the past decade was, however, lower than in most other OECD countries. This chapter sets the scene by examining developments in the labour market situation of older people in the wake of recent reforms in ageing and employment policies.

Prior to the 2011 reform, the pensionable age in Norway was 67 – yet a large share of employees left the labour force before that age, mainly via disability benefits or the Contractual Early Retirement schemes (AFP) implemented in the late 1980s. In 2010, 58% of the population aged 62-66 received a pension; 35% of that share received disability benefits and 20% AFP. This chapter analyses Norway’s actions to strengthen financial incentives to carry on working, including reform of its old age pension system and early retirement schemes.

Older peoples’ opportunities for remaining in the labour force are largely determined by employers. In general, hiring and firing decisions with respect to older people depend on employers’ perceptions about the adaptability and productivity of older workers, and on wages and other labour costs compared with what they have to pay for younger workers. These decisions are also affected by employment protection legislation and other labour laws. The purpose of this chapter is to provide an overview of measures taken, or that could be taken, to promote age diversity at the workplace; the evidence regarding senior wages, costs and productivity; and measures to protect employment opportunities rather than jobs.

In addition to strengthened economic incentives and age-friendly employer practices, employability and willingness to stay on are prerequisites for increasing employment rates for older workers. Three key factors here are up-to-date skills, ready access to employment services, and better working conditions. This chapter provides an overview of related measures – taken or that could be improved upon – to boost the employability of older workers.