Finland is experiencing a historic rise in the average duration of unemployment that is reaching unprecedented levels. According to one economist the issue isn’t a lack of motivation among jobseekers but rather a severe shortage of employment opportunities.
Published: 14/07/25 | 11:05
Sonja Gustafsson who holds dual degrees in economics and engineering and has extensive international experience has been unable to secure a job since being laid off during company-wide restructuring in spring 2024.
Despite previous roles in the EU in Brussels and various positions across Finland she now finds herself in the same situation as many highly educated Finns caught in an unresponsive job market.
“Before becoming unemployed I was being considered for several leadership positions,” she says. “Now I haven’t received a single offer.”
She has since expanded her job search beyond Finland.
“I’ve lived abroad before and speak several languages so my next position may end up being outside Finland,” she said.
Gustafsson is not alone as this past May the average length of unemployment in Finland reached 70 weeks, the highest recorded since tracking began in 2007. The duration differs significantly across age groups as those aged 20–24 were unemployed for an average of 34 weeks whereas those between 60–64 faced unemployment lasting more than 100 weeks.
Moreover, the number of people unemployed for over two years has reached an eight-year peak while those out of work for more than five years have reached a record high.
“There’s some comfort in knowing that others are also struggling. It would feel much worse if I were the only one not getting hired while others were finding jobs,” Gustafsson honestly noted.
She also voiced concern over recent policy changes affecting unemployment benefits and particularly the elimination of the exempt income allowance which had previously allowed recipients to earn small amounts without losing part of their benefits.
“Now it makes no sense to take on small freelance gigs. The system penalises people who are genuinely trying to stay afloat,” she said. “The incentive structure is flawed.”
Antti Ilvonen, who is a Senior Analyst at Danske Bank considers the rise in long-term unemployment alarming though still manageable.
“Compared to last year fewer people are entering unemployment but those who are, remain jobless longer. The fundamental issue is that there aren’t enough vacancies,” he explained.
Ilvonen attributed the situation to Finland’s overall economic slowdown noting that the job market typically takes longer to recover than the economy itself.
“The ratio of job openings to applicants is at its lowest point since the global financial crisis. This is starting to look like the post-eurozone crisis era,” he said.
While he supports the government’s long-term goal of improving employment incentives, Ilvonen argued that such strategies are ineffective in today’s climate.
“This isn’t about people being unwilling to work. It’s about the lack of available jobs.”
He also warned that extended unemployment can undermine people’s confidence in the future.
“When people fear they’ll be out of work indefinitely they reduce spending and increase savings which in turn delays recovery.”
Despite the challenges Ilvonen sees potential in rising consumer demand, improved purchasing power and lower interest rates though he emphasized that progress will take time.
Kalle Mäkinen, who is a seasoned expert with over two decades of experience in start-ups and corporate transformations is also navigating the difficult labour market while developing a possible business venture.
“I’m pursuing two paths that are finding a meaningful full-time job or launching a business of my own,” he said.
But competition has been fierce. “Job postings receive a huge number of applications. On LinkedIn you can see some roles gathering over 100 applicants within a short time and that’s just what’s visible.”
Mäkinen believes companies remain hesitant due to ongoing economic uncertainty.
“Firms are still reluctant to make new investments or hire staff. We need clearer signals to encourage them to take calculated risks.”
Nonetheless, he remains hopeful. “In a year I believe I’ll either have launched a business or joined a dynamic organisation or network. Finland’s start-up ecosystem is growing and new tech developments are creating openings.”
He also urged decision-makers to act decisively.
“The government and central bank must work to rebuild trust. That’s key to restarting investment and employment growth.”
