Nordic baby boom bucks pandemic trend in rest of Europe
Every two years, Nordic research institute Nordregio takes the temperature of the economy, labour market and population trends in all the Nordic municipalities and regions. This year, Nordregio's report "State of the Nordic Region" concentrates on the pandemic, maps its effects, and presents various measures of how resilient the Nordic model really is in times of crisis.
The report paints a picture of a Nordic Region that no longer really lives up to its good reputation for welfare for all and social equality, but which in general withstood the downturn in the global economy and recovered quickly.
A decade of falling birth rates
The people of the Region clearly have sufficient confidence in the system to have children during a crisis. Apart from Greenland, the number of births where higher in 2021 than 2020, although the increase in Sweden was marginal. In Norway, Iceland and Finland the higher figure represents a welcome break after a decade of falling birth rates.
The baby boom contributes to natural population growth in the Nordic Region during the pandemic, at a time when numbers were down in many other European countries.
Trust in social safety nets
“It seems as if Nordic couples who have been forced to put their careers on hold, have been on furlough or made redundant, saw an opportunity to have children and perhaps boost their family income with parental leave benefits,” says Nora Sánchez Gassen, researcher and co-author of the report.
Outside the Nordic Region, only a few countries registered higher birth numbers and only the Netherlands came close to the Nordic figures.
“One hypothesis is that young Nordic couples trusted that the state would compensate for lost income during and after the pandemic, that the social safety nets in the countries are strong enough,” Sánchez Gassen adds.
In EU terms, the Nordic countries have made massive investments in crisis packages, significantly higher than the average. Denmark invested most, corresponding to 32% of GDP. The Swedish figure was 16%.
Household incomes didn't fall
As the Nordic countries entered the crisis with relatively strong financial systems, they were able to spend the money on furlough schemes, tax deferrals and support for small and medium-sized enterprises. The investments in labour-market measures meant that average household incomes did not fall. The measures also played a key role in reducing the social impact of the pandemic, according to the report.
“The measures were exceptional and added to the already strong Nordic welfare systems. This was possible because our financial systems were significantly more robust than during the financial crisis of 2008" says Carlos Tapia, Senior Research Fellow at Nordregio and co-author of State of the Nordic Region.
"But even if the pandemic measures did not have a major impact on government debt and national deficits, they could not be continued indefinitely. It is doubtful whether the Nordic public finances could cope with a prolonged COVID pandemic”
Half as severe as the EU
Overall, the downturn in the Nordic economies was in line with the global average but much less severe than in the EU. Nordic GDP fell by 3%, compared to 5.9% in the EU. Due to its dependence in tourism, Iceland was hardest hit in 2020, its GDP falling by 7.1%.
The comparative figure for Denmark was 2.1%, in Norway it was 0.7%.
Older poeple and immigrants hardest hit
Despite crisis packages and welfare systems, the COVID-19 crisis has clearly exposed inequality between different income groups, especially in socio-economically disadvantaged urban and rural regions. Both in terms of infection rates and the social effects of the pandemic, the most vulnerable groups have been hardest hit: older people, people on low incomes and immigrants.
FACTS/Nordic economic support measures
The combined value of all Danish economic support measures amounted to 32.7% of GDP.
Sweden followed at 16.1% of GDP. Finland, Iceland and Norway invested an amount equivalent to 12-14% of their GDP.
By comparison, the economic support measures at the EU level represented around 10.5% of GDP.
FACTS/The State of the Nordic Region report
The State of the Nordic Region Report is produced and published by Nordregio every other year, in close collaboration with the Nordic Council of Ministers. It includes a unique collection of data on economics, demographics, migration, digitalization, employment, and much more. The report gives a comparative picture of the development in the Nordic countries at national, regional, and local levels through 26 signature maps and additional graphs. The Nordic Region is one of the most integrated regions in the world, comprised of Denmark, Finland, Iceland, Norway, and Sweden, along with Greenland, the Faroe Islands and Åland. Nordregio is a Nordic research institute on regional development and planning founded by the Nordic Council of Ministers in 1997.
Report launches on Nordic Day 23 March 2022
Welcome to join our five launch events in the Nordic capitals on Nordic Day, 23 March. Featuring ministers, parliamentarians, researchers, youth representatives, etc. Ask your questions live on site or watch online. For more information and registration, go to:
Press Contacts:
Gustaf Norlén, Senior Cartographer and Project Manager of the report
gustaf.norlen@nordregio.org
+46 76 169 39 54
Nora Sánchez Gassen, PhD
nora.sanchezgassen@nordregio.org
+46 70 931 08 08
