Norway: What Labour Market Exclusion Costs the State
The direct fiscal burden of keeping people outside the labour market — benefit expenditure, lost tax revenue, and the structural cost to public finances across Europe.
Country Profile
Direct benefit payments
NAV Omverdensanalyse 2025 — helserelaterte ytelser · 2025
→ Disability pension
NAV statistikk — uføretrygd 2024 · 2024
→ Sickness benefit
NAV statistikk — sykepenger 2024 · 2024
→ ALMP spend
NAV statistikk — arbeidsavklaringspenger 2024 · 2024
Estimated lost tax revenueestimate
Estimate: ~524k excluded working-age persons (disability benefit recipients not in employment) × NOK 550k median earnings × 34% effective income tax rate. Source: SSB income statistics 2024.
Total estimated fiscal cost
Sum of direct benefit expenditure (NAV, 2025) and estimated lost income tax revenue. Excludes healthcare costs attributable to labour market exclusion and social care costs, which would push the true fiscal cost higher.
Local currency: 197 NOK bn
Per working-age adult
€5,327
Context
Norway's benefit expenditure figure covers all health-related benefits (helserelaterte ytelser) as classified by NAV, including uføretrygd (disability pension), arbeidsavklaringspenger (work assessment allowance), and sykepenger (sick pay). This is the most comprehensive publicly available figure and is the basis for Gaute Eie's Finansavisen analysis. GDP denominator: SSB preliminary 2024 national accounts.
Methodology
Sum of direct benefit expenditure (NAV, 2025) and estimated lost income tax revenue. Excludes healthcare costs attributable to labour market exclusion and social care costs, which would push the true fiscal cost higher.
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