Chapter 5. The dynamics of Finnish labour markets in the 1990s Elli Heikkilä and Sirpa Korhonen Urbanisation and regional centralisation The basic features of Finland’s regional development after the Second World War have been urbanisation and regional centralisation. Both production activity and population have become increasingly concentrated in the growing central regions, particularly in Southern Finland. This change has however not happened uniformly, but has rather developed in terms of a number of drastic cycles. Regional mobility was at its peak in Finland in the turn of the 1960s and 1970s. Professional mobility was still relatively brisk during the second half of the 1980s. From then on change was significantly slower until the beginning of the 1990s, when the process of centralisation accelerated once again. After the depression at the beginning of the decade the growth of both population and the amount of jobs have increasingly come to be concentrated in a few of the largest metropolitan districts, and particularly in the capital district. On the other hand, a certain measure of regional ”centralisation” to the district and regional centres has also occurred throughout the country during this period. Regional centralisation and urbanisation are closely connected to economic growth and changes in basic economic structures. During the periods of rapid economic growth, urban living conditions act as the apex of growth enhancing the concentration of production, jobs and population in the big metropolitan areas. A novel characteristic of the last few years in regional population development has been that many of the smaller towns have become net migration loss areas. This is especially so for the industrial towns marked by a one-sided production structure, but also true of many regional centres in general. One reason for the escalation of migration in the 1990s was the change in the law concerning student residency policy that took effect in the summer of 1994. Basically this change in the law stated that students had to become “residents” in their locality of study, rather than retaining their residency linked to family home, or previous employment and/or abode etc. This major change is illustrated in the statistics by a sudden increase in migration at this time. In spite its rapid urbanisation however, Finland is still one of the least urbanised countries in Western Europe. The

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regional structure is still exceptionally decentralised as compared to other countries. In Finland the proportion of city dwellers in the total population was 64 per cent according to data for 1996, when the then EU average was over 80 per cent (Loikkanen 1998).

Performance of nine Finnish labour markets The subject of the research is the working-aged population, i.e. those from 16-74 years of age, in the nine local labour market areas in 1990-91 and 1996-97. Three local labour market areas represent cities (Helsinki, Tampere and Turku), three represent regional centres (Oulu, Jyväskylä and Rovaniemi) with the final three representing smaller centres (Rauma, Kajaani and Lohja). A local labour market area consists of a central municipality and of those of the surrounding municipalities from which at least 10 per cent of the employed workforce commutes to the central municipality, according to the working statistics of 1996. In accordance with this setting, stream chart material (gross stream) has been obtained from Statistics Finland, according to the primary field of activity of the population in the chosen labour market areas. The stream data serves to show the mobility between different labour market status groups from year t to year t+1. Separate data exists on those who migrated out of the labour market areas, on those who migrated into the labour market areas and for those who stayed where they were. Material is also available on international migration. The out-migrants have permanently moved away from within the labour market area’s boundaries. The in-migrants have moved within the boundaries from other parts of the homeland. The stayers are those people who have not changed their local labour market area during the period of t to t+1 years. The years covered by the data are those of the period 1990-91, when Finland sank into depression, and those from 1996-97, when Finland was emerging from this depression. The working-aged population is examined according to different demographic and socio-economic characteristics, such as age, sex, education, field of business, and status in the labour market. Education is viewed in terms of comprehensive, secondary, and higher levels. The fields of business include 1) agriculture, forestry and mining; 2) industry, energy, and water maintenance; 3) construction; 4) commerce, accommodation and nourishment; 5) transportation and traffic; 6) financial and business services; 7) public services and 8) other activity, and unknown activities. Status in the labour market is divided into those employed, those unemployed and those outside the workforce. Of those outside the workforce, the activity of students has been examined separately.

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Description of labour market areas Helsinki is the largest city in Finland and the capital of the country. 15 per cent of the job positions in the whole country are situated in Helsinki (and 27 per cent in the Helsinki district), most of them (4/5) are in the service sector. Activities most typical of the Helsinki district are finance and business services, wholesale trade and, from industry, the electronic and graphic industries and construction. Most of the headquarters of the major domestic enterprises are situated in Helsinki. The city of Tampere has grown due to industrial development. Nowadays the city dwellers are employed, in commerce and many high technology enterprises, as well as in traditional industrial manufacture. The city is also known for its wide educational and cultural offerings. Tampere is the third largest city in Finland. It has two universities. There are 16 municipalities forming the Tampere local labour market area. Turku is a port, and a commerce and exhibition city of national importance. The most noteworthy employers are social services, industry, commerce, and finance and insurance. Turku is also an important centre of education. There are 28 municipalities in the Turku local labour market area. The city of Oulu is the most important industrial and educational centre in Northern Finland, and the capital of Oulu province. The significance of the university has been substantial to the development of the city. For Oulu, industry and services are major employers. 14 municipalities form the Oulu local labour market area. Jyväskylä is known for its many industrial enterprises, but it is also a significant educational centre (“the Athens of Finland”). The 8 municipalities of the Jyväskylä local labour market area represent the region of Central Finland. Rovaniemi is the capital of Lapland province, and received town status in 1960. Most of the jobs are located in the service sector. Rovaniemi has become an important educational centre in Northern Finland. The two municipalities of the Rovaniemi local labour market area, which is situated in Lapland province, are Rovaniemi itself, and the rural municipality surrounding it. The port town of Rauma is situated on the coast of the Bothnia Sea. Industry is the main employer, with services following close behind. Rauma is one of the biggest ports in Finland. A teacher-training institute – a filial of the University of Turku – is situated in Rauma as is the Satakunta Polytechnic. Kajaani is a town of industry, services and education situated on the shore of Oulu Lake. There are wide stretches of uninhabited wilderness

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surrounding the town area of Kajaani. Most of the inhabitants receive their income from services, though the electronics and the wood-processing industries are major players in the local economy. Some units of the University of Oulu and the Kajaani Polytechnic operate in Kajaani. The Kainuu Vocational Institute and the Kajaani-Institute represent the vocational side of education provision. Adult training is given e.g. in the adult vocational education centre and in the Kajaani Development Centre. Kajaani local labour market consists of four municipalities. Lohja is a town (granted town status in 1969) in western Uusimaa, on the shore of the Lohja Lake. It boasts an abundance of electronic and construction material businesses. The greatest part of the workforce is situated in the fields of social services and industry. The population of Lohja was near 35 000 in 1997. Besides possessing two high schools and an incorporated adult high school, one can also find the federation of municipalities in vocational education, which consists of four vocational institutes. In addition, the town also boasts the Espoo-Vantaa Polytechnic, which is also situated in the region. In addition there residents have access to adult training in the municipality, e.g. the Centre for Extension Studies and the Vocational Adult Education Centre of Western-Uusimaa. Lohja local labour market area includes three municipalities. The largest local labour market area is that of Helsinki whilst in second equal place come the Tampere and Turku districts, who both have approximately the same number of inhabitants (190 000 and 170 000 in 1997, respectively). The average population change over the period 199097 was 3 per cent in Finland and 8 per cent in the nine local labour market areas. The local labour market areas have thus mostly experienced a net migration gain, whilst net migration loss was experienced across many parts of the country. Over the period in question, the Oulu local labour market area has grown most rapidly, whilst that of Rauma has experienced the greatest loss. Of all the regions concerned, the population of Oulu has grown most during the1990s, whilst those of Kajaani and Rauma regions have suffered from decreased population levels since 1992-93. With the exception of Oulu, Helsinki retains the largest percentage population increase. The superior numbers of excess births over deaths in 1997 had the greatest population growth significance in the local labour market areas of Oulu, Rovaniemi and Lohja. In the same year, in the cities and regional centres, students brought about the greatest part of the net migration gain. Helsinki also receives plenty of highly educated inmigrants. Unemployed people also migrated in large numbers, especially to Turku and Jyväskylä. Older and less educated people migrated away from the Helsinki district, whereas students migrate away from the smaller

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centres. In the Statistics Finland prognosis for the year 2030 the local labour market areas that will grow most are those of Oulu, Helsinki and Tampere . The population of Rauma and Kajaani will however continue to diminish. These local labour market areas will however grow substantially more than the average of the whole country. The number of jobs decreased by 13 per cent across the whole country during the period 1990-97. In the Oulu, Tampere, Helsinki, Turku and Jyväskylä local labour market areas the percentage decrease was however lower than the average figure for the whole country, though it was greater for the other LLMs, particularly so for Rovaniemi and Kajaani. The unemployment figures can thus be compared to the change in the number of jobs: unemployment thus remained highest in Kajaani and Rovaniemi during both years of observation (Figure 6). The average unemployment rate of the local labour market areas (combined) in 1997 (those unemployed as a proportion of the workforce) was however lower than the average for the whole country (17 per cent). Unemployment was at its peak across the whole country in 1994 (20 per cent), after which it has steadily decreased. Towards the end of 1999 the unemployment rate in Finland was down to 13.4 per cent.

Education levels The proportion of those educated beyond a basic level has risen constantly in Finland, with developments in this area continuing into the 1990s. In 1997, 43 per cent of those over 15 years of age in the whole country had a comprehensive education, 44 per cent had a secondary level degree, and 13 per cent a higher level degree. Regionally the level of education varies as follows: the greater the proportion of people in population centres, the greater the education level of the population. In the cities the educational level of the population was, at the end of 1997, 22 per cent higher than in the rural municipalities. 17 per cent of city dwellers have a higher level degree compared to 8 per cent of the inhabitants of rural areas. According to region, the education differences of the population are not particularly great, except for Uusimaa. Uusimaa had an educational level that was 12 per cent higher than the national average in 1997. On the other hand, differences in educational levels between the municipalities remain pronounced. The educational level of the male population over 15 is still higher than that for women, though women under 55 are already more educated than men of a similar age. The educational level of women has indeed risen faster than that of men throughout the 1990s. Regional migration affects the educational levels of the population as a whole. Of those who migrated in 1990-95, 25 per cent had a comprehensive education, when they represent 45 per cent of the whole

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population. Whilst we can see that there were 22 per cent with a higher education, where their proportion of the whole population is only 12 per cent. Education therefore increases the eagerness to migrate. Most of the migrants had a secondary level degree; most of those who migrated in 1997 had an upper secondary level degree. The strong migration of the latter part of the 1990s has therefore increased differences in educational levels between regions. Examined by region, the regions that had a clear net migration gain in 1995 were Uusimaa, Pirkanmaa and Varsinais-Suomi. Uusimaa is different from the other net migration gain regions in that more people with a comprehensive education migrated out than in. The Central Finland region had a net migration balance as a whole, but lost a relatively large number of people with a higher education and gained those with a comprehensive education. Among the regions that lost educated population the most were Lapland and Satakunta. Of all the migrants, over 80 per cent went to cities and densely populated municipalities, whilst only around 20 per cent went to the countryside. The higher the educational level of the migrants, the greater the number that migrated to the cities. Emigration became more pronounced after 1992, whilst during this period immigration also increased. The 20 universities in Finland are situated in 11 localities. In 1998 they had a total of approximately 147,000 students. In the same year polytechnics were found in 22 localities, and they had over 82,000 students. The proportion of students coming from the regions with universities was highest in the universities of the Helsinki district; over half of the students came from Uusimaa in virtually all of the universities in the area. A quarter of the students of Åbo Akademi come from Varsinais-Suomi but the university also attracts Swedish-speaking youngsters from across a wide area. It should also be noted that the universities of Lapland and Oulu collect students from right across northern Finland. The regional influence of the universities can be examined by comparing the differences between those taken as students from the respective region and those who have received working positions there. Of all the universities of the capital district, a greater number of graduates subsequently found work in Uusimaa than were taken from the region as students. Of the polytechnics, the polytechnics of Uusimaa, Northern Ostrobothnia and Varsinais-Suomi are regional, because 70-80 per cent of their students come from the region, and 75-90 per cent are employed in their own region after graduation.

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Field of business and education The initial data is the sum of stayers, domestic in-migrants and outmigrants in the local labour market areas. The difference between the employed that entered the field of business and those who left has been calculated according to the eight fields of business in the two periods of observation. The results are the balances of the fields of business. From 1990 to 1991 the balance is negative in virtually all fields of business in the local labour market areas (Figure 5.1). The public service sector is the one exception to this rule with a positive balance in multiple fields. 10000

persons

0 -10000 -20000 -30000 -40000

Agriculture, forestry and mining

Manufacturing

Construction

Trade, hotels and restaurants

Transport and communications

Finance and business

Public services

Other or unknown

Lohja

Kajaani

Rauma

Rovaniemi

Jyväskylä

Oulu

Turku

Tampere

Helsinki

-50000

Figure 5.1. Net change of the employed according to field of operation in the local labour market areas in Finland in 1990-91 (Data: Statistics Finland)

The 1996-97 period displays almost the exact opposite trend, i.e. nearly all fields received more jobs, with the exception of agriculture and that field classed as “other”. The main portion of the new jobs were created by small business enterprises of 4-5 persons. The public services and the traditional industry sectors received most people, though trade, construction and finance have also gained. Industry received the

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proportionally largest numbers in Rauma and Kajaani, whilst public services did likewise in Tampere and Rovaniemi. The educational level of the local labour market areas between 1990 and 1996 was compared, having been calculated from the sum of the stayers and in-migrants. From 1990 to 1996 the relative proportion of those with only a comprehensive education was found to have decreased in these areas from approximately 40 per cent to 36 per cent. The proportion of lower secondary level education had also diminished slightly. In consequence we can see that degrees of upper secondary and higher level education had thus become more common. In 1996 the educational level of the local labour market areas was higher than the average level for the whole country. In the country as a whole, the proportion of comprehensive and lower secondary level degrees is larger than in the local labour market areas, which thus accommodate people with education levels higher than the average. The Helsinki local labour market area has the highest education level, as those with higher level education qualifications made up over 20 per cent of the total employed in the area in 1997. The lowest educational level was found in Lohja and Rauma, where it is the same as that of the average level for the country as a whole.

The characteristics of stayers and migrants There was a slight majority of women in the ”stayers” group, except in Kajaani during both of the observation years and in Lohja in 1996. Women were slightly more active as migrants than men. During both periods, all areas except Lohja had a majority of female out-migrants. Inmigrant numbers also showed a female majority in all areas but Kajaani and Lohja. The immigrants that migrated to the local labour market areas showed a male majority in 1990, but in 1996 in Rauma and Kajaani a substantial female majority was recorded. Out-migrants had a female majority in the youngest age group, those between 16-24 years of age; this is also the largest absolute migrant group. With men we find that there are most migrants in the 25-34 age group. In 1990, the largest group of domestic migrants, relatively speaking, that migrated to the Helsinki local labour market area was that of 16-24 year old women; in the other areas the 25-34 age groups of both men and women were the largest. In 1996, 16-24year old women migrated most to all areas; with men, the 25-34 year old were the largest group in this category. The willingness to move is greatest among students and young people in the 20-29 age group who are entering the “working age” category. This trend decreases steeply as age increases (Tilastokeskus 1999).

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The out- and in-migrants are usually more educated than the population that has stayed in the area, this is so because most of the arrivals are younger than the stayers. Of the nine local labour market areas, Helsinki had the most educated stayers, whereas the least educated were in Lohja and Rauma. People who move into the Helsinki area have a higher level of education than the stayers, but a lower level than those who leave.

Primary field of activity The primary field of activity of those who stay in a LLM was compared with that of the out-migrants and the in-migrants in both 1990 and 1996 (Figure 5.2). From 1990 to 1996 the proportion of those employed has diminished across all groups, and the proportion of the unemployed has grown accordingly. In addition, the relative proportion of students has grown over the six years in question. The proportion of the group entitled ’other’ (the pensioners, those in military service and others outside the workforce) has merely stayed as it was. The employment proportions of domestic out-migrants and domestic in-migrants were higher than those of the stayers in 1990, but in 1996 less than half of the leavers and new arrivals were employed. Students have traditionally formed a large percentage of the leavers and arrivals; there was approximately one quarter of them in both groups in the latter year of observation. Moreover, the proportions of the unemployed are larger in the migration groups when compared to that of the stayers. Around half of the immigrants were employed in 1990, but in 1996 only one in four was employed. Indeed, during this period one fourth of the arrivals were unemployed, and ”others” formed the largest group, i.e. those outside the workforce.

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100% 80% 60% 40% 20%

Employed

Unemployed

Students

Immigrants 1996

Immigrants 1990

In-migrants 1996*

In-migrants 1990*

Out-migrants 1996*

Out-migrants 1990*

Stayers 1996

Stayers 1990

0%

Others

Figure 5.2. Primary activity of stayers, out-migrants, in-migrants and immigrants in the local labour market areas in Finland in 1990 and 1996. Country internal migration. (Data: Statistics Finland).

When they are examined according to their primary field of activity and mobility, differences emerge between the local labour market areas. Relatively speaking, there were most stayers in Helsinki in both years under observation, and least in Kajaani, where the proportion´ of those unemployed remained high, as with Rovaniemi. Of the domestic migrants who migrated to Helsinki and Lohja over half were employed, whilst one in four of those who migrated to Kajaani were unemployed in 1996. Focusing on students as in-migrants, most went to Rovaniemi, Turku, Jyväskylä and Oulu. The employment proportion of immigrants in the areas that received them in abundance has however dropped significantly in the years under observation. Tampere, Jyväskylä and Rovaniemi, relatively speaking, received most unemployed immigrants in 1996. The relationship between developments in the primary field of activity and net migration is examined here in three-dimensional form. Net migration has been measured as a proportion of the population of the region at two points in time, in 1990-91 and 1996-97. Of the cities concerned, Helsinki received most employed people, that is to say, people who were employed during the next year, in 1991. Some employed

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people, who were outside the workforce the next year, left the area. Most of them were pensioners, because migration flows out of the Helsinki area tend to consist of the aged. In the next observation period, in 1996, Helsinki received still more employed people and also large numbers of students. A certain number of people who had shifted from unemployment and studies to employment also migrated to the area. Of the regional centres, Oulu received most net migration gain from the flow of the employed, losing mostly graduating students who shifted into working life. In the latter period in question, Oulu has gained students and unemployed people. Oulu continued however to experience the net loss of graduating students. Of the smaller centres Rauma received some people from the category of “outside working life” and some from the ranks of the employed at the beginning of the 1990s, but the largest group was outmigrants shifting from studies into working life. In 1996 Rauma experienced losses from virtually all groups. Moreover, unemployed people, who continued to be unemployed, or shifted outside working life, migrated to the local labour market area.

In- and out-flows to the workforce The in- and out-flows to the workforce have been examined as the sum of the stayers, in-migrants and out-migrants in each of the local labour market areas. The in- and out-flows have been calculated in proportion to all those employed. In 1990-91 the stream out of work is at a high level, influenced predominantly by the depression (Figure 5.3). The highest proportions (16 – 17 per cent) were in Kajaani and Rovaniemi and the lowest (12 per cent) in Helsinki. In 1996-97 the out-flows were at a lower level than those at the beginning of the decade. The areas of Rovaniemi and Kajaani again lost most (11-12 per cent), retaining over the whole period a high level of unemployment, whilst Lohja and Helsinki lost least. The largest, relatively speaking, in-flows were to be found in Kajaani and Rovaniemi (approximately 18 per cent), whilst recruitment was at its lowest in Helsinki.

95

20 18 16 14 12 % 10 8 6 4 2

Exit 90-91

Exit 96-97

Entry 90-91

Lohja

Kajaani

Rauma

Rovaniemi

Jyväskylä

Oulu

Turku

Tampere

Helsinki

0

Entry 96-97

Figure 5.3. Total exits and entries in per cent of stock in Finland in 1990-91 and 1996-97 (Data: Statistics Finland).

Who gets the new jobs? In what follows, the proportion of new jobs that local workers get in the two observation periods has been examined. In the 1990-91 period, across most of the local labour market areas, local workers more often than not obtained the jobs available. This local ”bias” was however much less pronounced in the 1996-97 period, illustrating greater mobility in the workforce towards the end of the 1990s. New jobs have emerged for example in the electricity and electronics industries, which have needed professional knowledge in a narrow field. On the other hand, non-local manpower has been employed in construction. Locals were often recruited in cities though less so in the regional or smaller centres, which tend to have a smaller workforce potential in all fields, and thus often need outsiders the most. In Lohja those who have come from elsewhere were hired predominantly during the 1996-97 period rather than in the first period at the beginning of the 1990s. As the proportion of locals and non-locals is examined according to acquisition of new jobs and by level of education, it can generally be seen that the higher education profile a job position has, the more often a person coming from outside of the local labour market area will possibly be chosen to fill it. The ”comprehensive level” jobs have been filled with

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locals up to 86-95 per cent in the two observation periods, in Helsinki this was particularly so. Of the secondary level jobs 81-90 per cent went to the local employed, whereas higher level jobs present the greatest disparities in rates of local recruitment. Depending on the local labour market area, figures ranged from 70-88 per cent. Examined according to field of business, local workers were hired most often in the major cities. In agriculture and forestry stayers were employed most in the Kajaani area, and in industry those living in major cities were most often employed. The paper industry, for example, is a field into which approximately one in four employed in-migrants, holding a higher level of education, found work in the area. Positions in manufacture of machinery and equipment in the areas of Southern Finland and in Kajaani have more often than not, been filled by locals. In the manufacture of electronic technology products, which has expanded rapidly as a field in the 1990s, those jobs with a higher level education profile were more likely to be filled by non-locals in 1997 than in 1991. Finance, real estate and other business services were best able to retain their highly educated local manpower in the Helsinki local labour market area. In data processing however, big differences emerged between the areas in terms of the proportions of those employed in services in the field.

Index of performance Representing the period 1990-91, Figure 5.4 tells how the stayers have been employed according to level of education from the different classes of primary activity: Rauma was the worst and Kajaani the best area in employment terms. The two areas differ in the case of the stayers who continued their work so that Kajaani has more negative values than Rauma. There are substantial differences between those people with higher education who shifted from unemployment to employment, which has happened significantly more often in Kajaani than Rauma. In 1996-97 the best area is Lohja and the worst Rovaniemi (Figure 5.5). The employment proportions of Rovaniemi are worst nearly in all groups. Especially those with a comprehensive or secondary education have had difficulties in getting employment in Rovaniemi, as compared to Lohja. With the highly educated, a more substantial difference exists when shifting from studies to work. In Rovaniemi the highly educated have had better situation compared to Lohja to continue working in the local labour market area. The percentages in figures 5.4 and 5.5 are added up and the result is divided by nine, which produces the average employment percentage in an area. These ”indexes of performance” have been united into a straight deviation from both years in order of size and according to the local

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labour market area: the largest is the best and the smallest the worst. The regions of the preceding picture have been chosen according to Table 5.1. In the table in 1990-91 the Lohja area is almost at level with Kajaani, which is the best in the next period. Helsinki is the second best in 199697. Table 5.1. Index of performance of the Finnish labour market according to labour market areas arranged from the worst to the best in 1990-91 and 1996-97 (Data: Statistics Finland).

Index of performance Index of performance in 1990-91 in 1996-97 _____________________________________________________ Rauma -2,43 Rovaniemi -3,26 Jyväskylä -0,95 Jyväskylä -2,67 Tampere -0,88 Kajaani -1,55 Turku -0,40 Tampere -0,73 Rovaniemi -0,14 Turku -0,01 Helsinki 0,37 Rauma 0,12 Oulu 0,94 Oulu 0,33 Lohja 1,15 Helsinki 0,75 Kajaani 1,20 Lohja 2,18 Figure 5.4. Best and worst shift to labour market n Finland in 1990-91 Data: Statistics Finland.

Still in job LO W 20

Ed uc. to jo b HIGH

10

Still in job MIDDL E

0 -10 -20

Ed uc. to jo b MIDDLE Ed u c. to job L OW Un emp l. to jo b HIGH

Ka ja an i

Still in job HIGH Un empl. to jo b LO W Une mp l. to job MIDDLE

Ra uma

98

Still in job LOW 10 5 0 -5 -10 -15

Educ. to job HIGH Educ. to job MIDDLE

Still in job MIDDLE Still in job HIGH

Educ. to job LOW

Unempl. to job LOW

Unempl. to job HIGH

Lohja

Unempl. to job MIDDLE

Rovaniemi

Figure 5.5. Best and worst shift to labour market in Finland in 1996-97. Data: Statistics Finland.

Net migration according to the labour market status The data consists of in- and out-migrants for each of the local labour market areas and the resulting net migration figures according to primary activity from year t to t+1. The in- and out-migrants are added up and the result is divided by two. Those who moved into employment, studies, unemployment and outside the workforce are added up from the net migration. The result is negative or positive. Each of the four figures is divided by the figure acquired from the previous calculation. With the figures acquired from these calculations a column diagramme is constructed for each local labour market area in the two periods of observation. The column from the earlier period shows the net migration gain of the people who received a job or a place of study in Helsinki and the net migration loss of people who drifted into unemployment or moved outside the workforce (Figure 5.6). The other cities and regional areas received a net migration gain from all the groups of primary activity with only Turku being an exception to this trend; there people shifting outside the workforce have left the area. The smaller centres differ from each other: Rauma has experienced only net migration loss consisting of people

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who came to work and the unemployed; the loss in Kajaani consists of those shifting to work or studies, whilst the gain relates to those unemployed or outside the work force. Lohja in turn has lost people who shifted to studies or unemployment and gained those employed and outside the work force. From 1996 to 1997 almost all of the cities and regional centres experienced net migration gain from all groups. Helsinki and Rovaniemi were however the exceptions here; they lost people who shifted outside the workforce, in addition to which Rovaniemi lost those who shifted to employment. The smaller centres have suffered a net migration loss from all groups; of these the only exception is Kajaani, which gained people who shifted to unemployment. Three diagrammed pairs are examined, with the employed, students and the unemployed in the two periods (Figures 5.8-10). The primary activity from figures 5.6 and 5.7 is on the vertical axis; the index, acquired by totalling the percentages of the three educational fields from the net diagrammes, is on the horizontal axis (Figures 5.4 and 5.5). The first figure represents the employed and each point represents one local labour market area. The point for Helsinki is the uppermost on the right. Kajaani’s value in the performance index for the employed is the lowest on the left in the first period while Rauma’s point is the lowest in net migration. Helsinki has thus received employed people and in addition, according to the index, the stayers have been employed reasonably well. The labour market areas locate in the different way in the years 1990-91 and 1996-97. Helsinki is again holding the best position in net migration and both Rauma and Kajaani have the worst position respecting net migration. Lohja has the highest value for the index of performance among employed and Kajaani the lowest. The students’ trend line is opposite to that of the employed; it descends and the phenomenon is more steeply in 1990-91 and less steeply in the later period (Figure 5.9). The most negative regions concerning net migration are Kajaani, Lohja and Rauma and the most positive development in net migration has been in Turku labour market area during the both periods. The index of performance for the students has been the best in Kajaani in 1990-91 and it was the best in Helsinki in 1996-97. The most negative values for the index are found from Rovaniemi labour market area during the both periods. The trend of the unemployed is ascending in 1990-91 and descending in 1996-97 (Figure 5.10). There is out-migration of the unemployed in Helsinki, Rauma and Lohja in 1990-91. At that time Kajaani, Tampere, Rovaniemi and Oulu represent the ”best” regions in this respect. They experience net migration gain from the unemployed and

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the stayers have been employed fairly well. In 1996-97 the same regions are below the zero line in net migration and Jyväskylä on the negative side of the index of performance. Jyväskylä has experienced net migration gain from the unemployed, but the unemployed stayers have not been employed very well.

0,4 To Job Net

0,3

To Studies Net To Unemployment Net

0,2

To Other Net

0,1 0,0 -0,1

Lohja

Kajaani

Rauma

Rovaniemi

Jyväskylä

Oulu

Turku

Helsinki

Tampere

-0,2

Figure 5.6. Net migration according to labour market status in Finland in 199091. Data: Statistics Finland. 0,8

To Job Net

0,6

To Studies Net To Unemployment Net

0,4

To Other Net

0,2 0,0 -0,2 -0,4

Lohja

Kajaani

Rauma

Rovaniemi

Jyväskylä

Oulu

Turku

Tampere

Helsinki

-0,6

Figure 5.7. Net migration according to labour market status in Finland in 199697. Data: Statistics Finland.

101

1990-91 0,4

Ta

0,2

Ou

Ro

Tu

Jy -1

Lo

0

-0,5

Ka

He

0 Ra

0,5

-0,2

1996-97 0,6 He

0,4 Jy Ro

-1 Ka

-0,5

Ou

Ta

0,2

Tu

0 -0,2 0

Lo Ra

0,5

-0,4

Figure 5.8. The employed in the two periods by index of performance and net migration in Finland. He= Helsinki labour market area (LMA), Ta= Tampere LMA, Tu= Turku LMA, Ou= Oulu LMA, Jy= Jyväskylä LMA, Ro= Rovaniemi LMA, Ra= Rauma LMA, Ka= Kajaani LMA, Lo= Lohja LMA. Data: Statistics Finland.

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1990-91

Jy

Ro

Ta

0,08 Tu

Ou

Ra -1,5

-1

He

0,04 0

-0,5

0 -0,04

Lo

0,5

Ka 1

1,5

1996-97 Tu

Jy Ro

-3

-2

0,2 Ou Ta 0,1 0 Ra 0 -0,1

-1 Ka

He

1 Lo

-0,2

Figure 5.9. Students in the two periods by index of performance and net migration in Finland (for explanations see Figure 5.8). Data: Statistics Finland.

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1990-91 0,1 Ka 0,05 Ta Tu Jy -2

Ra

-1

He

Ou

Ro

0 0

Lo

-0,05

1

2

1996-97 Jy

-1

0,05 Ta Ro 0 He -0,5 0 -0,05

Tu Ka 0,5

Ou 1

1,5

Lo

2

Ra -0,1 Figure 5.10. The unemployed in the two periods by index of performance and net migration in Finland (for explanations see Figure 5.8). Data: Statistics Finland.

Mobility in Finland – Conclusions Mass unemployment was prevalent across Finland for the whole 1990s. After economic growth accelerated in the middle of the decade the level of unemployment decreased, though structural unemployment remained. Across various parts of Finland, and within different LLMs however development continued to take place at a differential pace. Unemployment is thus not only regional but structural also. Unemployment occurred in fields that simply could not adjust to new market conditions to simply ”create” new jobs for the labour that had been shed. The potentially explosive unemployment situation at the beginning of the decade was thus

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encountered with national countermeasures. Once unemployment had become multidimensional however such national measures proved to be insufficient; in different circumstances and with different groups therefore, a range of different, locally tailored solutions were instead adopted The gradual expansion of the role and scope of actors in employment management has thus come to be characteristic of employment management in Finland, particularly in the latter half of the 1990s. Regional mobility encouraged through workforce policy training has also proved to be an efficient promoter of employment in Finland. Support for tele-commuting and the expansion of the local labour market areas, for instance both play significant roles in this process. A programme-based phase of regional development has continued the long traditions of Finnish regional policy. The differences between the regions are now levelled by recourse to both national structural policies and via help from the regional and structural policies of the European Union. In the structural fund period running from 1995-99, the support directed through such programmes it can be argued, helped to renew and diversify Finnish regional, economic, and labour policies. In addition, a competency centre programme designed to support regional specialisation and co-operation between the various competency centres was initiated at the beginning of 1994. The focus of these competency centres was on local activity, and they are usually situated in localities offering higher level education opportunities. Education and research thus form a significant part of Finnish strategy in this regard. The basic policy of the Government emphasises ”know-how” and knowledge that will benefit all geographical areas on an equal basis. A higher education place is offered to 60-65 percent of the whole age group leaving secondary school. A wide network of higher education institutes and polytechnics now covers the whole country. The number of higher level students has grown 32 per cent in the period 199098. In 1998 approximately 70 per cent of university students in Finland studied in universities situated in one of the major city regions. The periods of observation concerning Finland were the years 199091 and 1996-97 in the stream data. During the former period Finland was sliding into depression, whilst in the latter period it was rising out of that same depression, albeit at a different pace in different areas. The local labour market areas are divided into three classes: major cities, regional centres and smaller centres. The major cities are situated in southern Finland in a triangular area. The largest one being Helsinki, the capital of the country. The other major cities are Tampere and Turku. Every major city has several institutes of higher education and

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polytechnics. The largest regional centre is Oulu, the others being Jyväskylä and Rovaniemi, all of which house a university. These universities have had a substantial effect on the development of the central municipality. In the smaller centres, Rauma, Kajaani and Lohja, units of universities are situated. The possibility of obtaining, at least, a polytechnic education is offered in every one of the local labour market areas. The population increased in 1990-97 in all the local labour market areas except those of Kajaani and Rauma. At the same time the number of jobs decreased in all of the areas following the depression. Midway through the decade the number of jobs began to increase as the economic situation started to recover. The net migration of the local labour market areas was thus positive in almost all of the areas at the beginning of the 1990s, but negative in Rauma, Kajaani and Rovaniemi at the end of the decade. Within the two periods concerned net changes in the numbers of employed have been compared according to field of business in each of the local labour market areas. In 1990-91 there was a decrease in all fields except that of public services. In 1996-97 however almost all fields experienced increases. Proportionately speaking, public services and industry received most employed people. The net change of the employed, according to education level, shows that the decreases of the earlier period fell mostly on people with a comprehensive or lower secondary level of education. When employment increased during the latter period the proportion of people with an upper secondary level education grew most. In the nine local labour market areas the level of education is higher than that of the average level for the country as a whole; of the regions, Helsinki has the highest level of education whilst Lohja and Rauma have the lowest. The migrants and the stayers differ markedly in the data. There was a slight majority of women in the migrants, who are generally younger than the stayers; of the women, the most active age group is that of the 1624 year olds, whilst for the men it is those in the 25-34 age group. Both out- and in-migrants are more educated than the average population of the region. The Helsinki area differs from the others in the respect that there, too, the in-migrants have a higher education than the stayers, but with the out-migrants the level of education is lower. When the years 1990 and 1996 are compared according to primary activity, all the local labour market areas can be seen to have lost employed people and gained students and unemployed people. Particularly with regard to out- and in-migrants the number of employed people has decreased, though the number of students has accordingly

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increased substantially. When the proportion of the change of primary activity is compared with the net migration proportioned to the population of the area, we can see that from 1990-91 the regions of Tampere, Oulu, Jyväskylä, Rovaniemi and Lohja have performed in a similar fashion. These regions received net migration gain chiefly from employed people who came to work and net migration loss from students entering working life. From 1996 to 1997 Helsinki, Tampere and Oulu gained most from the ranks of the employed who came to work but also substantially so from the young who came to study. At that time Turku, Jyväskylä and Rovaniemi gained most from students and in addition from employed people who came to work. In the smaller centres the common feature was that they continued to lose people from different groups of primary activity, and by the end of the 1990s, net migration loss in their respective areas had increased even further. Who gets the new jobs? In 1990-91 local workers were hired into new jobs more often than in the latter period, which shows the greater mobility of the workforce in the latter period. In major city areas locals were recruited more often than in regional centres, and outsiders were needed most in the smaller centres. The functionality of the local labour markets was examined by observing the employment of the stayers according to classes of primary activity. The average index of performance of the labour market was then listed by arranging the nine areas from worst to best in the both periods of observation. On these grounds the ”best” and ”worst” areas were chosen.. Rauma was the worst and Kajaani the best in 1990-91, where the greatest differences emerged in relation to the highly educated who shifted into working life: jobs have been easier to find in Kajaani than in Rauma. Rovaniemi is the worst and Lohja the best in the 1996-97 period, where it was significantly more difficult to find a job in Rovaniemi with only a comprehensive or secondary education. Competence and ”know-how” are important elements in regional development. They are intimately connected with the creation of, and accessibility to the high quality workforce needed by each region, as well as in the general interest of the region as a whole, in particular with regard to the prospective location of profitable economic activities. Regional development is linked to migration and population development. Higher education and other institutions have proved to be important in population development. Such attractive institutions are like pumps that suck in young people to the region. For the types of location viewed here institutions like these help to develop labour markets and to produce people with competence in areas that fast growing enterprises find

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attractive. In consequence, it is within such locations that these growing enterprises often choose to congregate (Aronen & Fagerlund 1999).

References Aronen, Kauko & Markku Fagerlund (1999) Maaseutu- ja kaupunkipolitiikan yhteensovitus. Suomen Kuntaliitto. Loikkanen, Heikki A. (1998) “Alueellinen kehitys Suomessa.” In Pekkarinen, Jukka (ed.) Takaisin täystyöllisyyteen. Lähivuosien talouspolitiikan suunta. Työväen sivistysliitto. Tilastokeskus (Statistics Finland) (1999). Suomen vuosisata.

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First published in 2001 by Nordregio. PO Box 1658, SE-111 86 Stockholm, Sweden Tel. +46 8 463 54 00, fax: +46 8 463 54 01 e-mail: [email protected] website: www.nordregio.se

Local labour market performance in Nordic countries. Editor Lars Olof Persson. Stockholm: Nordregio 2001 (Nordregio Report 2001:9) ISSN 1403-2503 ISBN 91-89332-21-0

Nordic co-operation takes place among the countries of Denmark, Finland, Iceland, Norway and Sweden, as well as the autonomous territories of the Faroe Islands, Greenland and Åland. The Nordic Council is a forum for co-operation between the Nordic parliaments and governments. The Council consists of 87 parliamentarians from the Nordic countries. The Nordic Council takes policy initiatives and monitors Nordic co-operation. Founded in 1952. The Nordic Council of Ministers is a forum for co-operation between the Nordic governments. The Nordic Council of Ministers implements Nordic co-operation. The prime ministers have the overall responsibility. Its activities are co-ordinated by the Nordic ministers for co-operation, the Nordic Committee for co-operation and portfolio ministers. Founded in 1971.

Stockholm, Sweden 2001