IMPACT
01/19/2018 05:45 am ET

Here's Why Norway Is Consistently Rated The Best Place In The World To Live

"It really does feel as if Norwegian society invests in us," one resident says.
Simon and Julie Irgens with two of their children in Oslo, Norway. They have benefited from generous government parental
Christina Skreiberg
Simon and Julie Irgens with two of their children in Oslo, Norway. They have benefited from generous government parental policies.

When Simon and Julie Irgens’ first child, Henning, was born, they both took several months of parental leave to be at home with their newborn ― some time together, some on their own. They did the same two years later when Henning’s little sister Inez was born, and the same again when Axel, now two, was born.

Altogether, the Irgens have enjoyed a total of three years’ leave, paid for by the government.

“Having that time with the kids from the start has been extremely important to me. To all of us,” said Simon, a Danish architect who moved to Julie’s home country of Norway in 2011. “It gave me a chance to bond with them from the beginning; it made us more equal as parents from an early stage in their life.”

The Irgens are in an intense period of their lives, juggling full-time jobs and raising children, but they say they feel supported by their workplaces.

“At our workplaces there is a collective understanding that your kids and family come first. At 3:30 p.m., I stop whatever I’m doing and leave work to fetch our kids,” said Julie, a writer, adding, “I don’t think the workplaces would attract the most talented people if they wouldn’t offer this kind of flexibility.”

“I pay my tax happily,” Simon said. “We get so much in return. It really does feel as if ... Norwegian society invests in us.”

Inez and Axel Irgens having fun at home.
Christina Skreiberg
Inez and Axel Irgens having fun at home.

Norway’s strong social security net, which includes generous parental leave policies, is  a key reason the country of just over 5 million people is consistently rated one of the best places in the world to live.

It has recently been given a high profile in the United States, following reports that U.S. President Donald Trump suggested America should admit more immigrants from Norway, rather than from “shithole” countries. Amid widespread outrage at the remark, many also questioned why Norwegians would even want to come to the United States.

Norway topped the United Nations’ World Happiness Report 2017 (the U.S. came in 14th), ranking highly in indicators including “caring, freedom, generosity, honesty, health, income and good governance.” It also took top spot on the Legatum Institute’s 2017 Prosperity Index, and in 2016, was ranked the best democracy in the world for the sixth time in a row by the Economist Intelligence Unit, a London-based consultancy. 

A view of the port in Oslo, Norway.
JTB Photo via Getty Images
A view of the port in Oslo, Norway.

Norway was also name-checked in the U.S. presidential race. In the first Democratic presidential debate in October 2015, Sen. Bernie Sanders (I-Vt.) said, “I think we should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people.”

“Most people feel they are part of the democracy and have a shared experience in society,” said Karl Ove Moene, professor in economics and leader of the research team at the Centre of Equality, Social Organization, and Performance  at the University of Oslo. “Norwegians recognize our politicians as regular people, not some sort of elite.”

For 10 years, Moene has been researching the “Nordic Model” – the economic framework common to Norway, Denmark, Sweden, Finland and Iceland that advocates social equality. “Early intervention in child care is very important for female labor force participation,” he said. “You see, the value of this participation is of a similar size as the value of our oil. And that would never be possible without subsidized child care.”

Karl Ove Moene in his office.
Christina Skreiberg
Karl Ove Moene in his office.

Parent-friendly policies are just one part of Norway’s welfare state. Everyone is covered by public health insurance ― meaning free health care at the point of access ― the country offers free public school as well as higher education, and workers rights and unions are strong. If you lose your job or fall ill, the welfare system has your back, with the government providing financial support for over a year in some cases.

The Norwegian Labour and Welfare Administration administers one-third of the national budget ― 468 billion krone ($58 billion) ― through unemployment benefits, work assessment allowances, sickness benefits, pensions, child benefits and cash-for-care benefits.

Of course, all these policies cost money. Norway benefits from a $1 trillion sovereign wealth fund built from the profits of the country’s oil riches. The country is also considered to have high taxes: The average income tax for a single person with no child is 27.9 percent (it is 26 percent in the U.S.), according to the Organization for Economic Cooperation and Development, with top incomes taxed at a rate of 39 percent. And a 25 percent value-added tax on most goods and services makes Norway one of the most expensive countries to live in.

That said, Norway has one of the highest median salaries in the world, and the country fares well when it comes to equal pay for men and women. 

“When I talk to American economists ― many of them are my friends and colleagues ― and tell them about our strong unions, our employer associations, our generous welfare state … they think I’m describing a recipe for a macroeconomic catastrophe,” Moene said. “But the thing is that these things are complementary to capitalist dynamics. The economic growth from 1930 is higher in Norway than in the U.S., per capita, even when we exclude oil. The welfare system is a recipe for a wealthy country.”

But Norway is not a utopia, and it has its share of social and environmental issues.

While lauded for its green credentials ― 98 percent of Norway’s electricity comes from renewables (mostly hydropower), it’s a world leader in electric vehicles, and the Norwegian Central Bank has advised the government to ditch its oil and gas investments  ― Norway is the seventh-largest exporter of emissions, according to a report from Oil Change International. The government is also opening up the Norwegian Arctic for oil exploration, despite challenges from environmentalists.

The number of people living in poverty is also on the rise in Norway, increasing from 7.7 percent in 2011 to 9.3 percent in 2015, according to a recent study by The Norwegian Labour and Welfare Administration, or NAV. “Differences in income have increased in recent years,” said Yngvar Åsholt, director of the Department of Research and Analysis at the NAV.

“The rich are getting richer, while income growth among low income groups has stagnated,” Åsholt added. “This is due to higher immigration, both because of labor migration and an increased inflow of refugees. These groups have a weaker position in the labor market than native Norwegians.”   

There has also been a rise in anti-immigration sentiment over the last few years. The 2017 Norwegian elections saw the anti-immigration, populist Progress Party gain more than 15 percent of the vote to stay in coalition with Prime Minister Erna Solberg’s Conservative Party.

The oil-rich nation has also been hit by a decline in oil prices. This has made it “more difficult to maintain the welfare level among low income groups,” Åsholt said. “Economically this is unfortunate for the nation. Lack of work and low income leads to health challenges and can weaken the foundation of our generous welfare state ― which has been an important basis for the economic growth in Norway through many years.”

Ultimately, Moene worries that the welfare system might eventually become a victim of its own success. “The model seems to create a large upper class, and this group often [wields] great political influence,” he said. “Many in the upper class are critical of welfare spending even though these social democratic institutions may have laid the foundation for their affluence.”

The Irgens playing Monopoly in front of the fire.
Christina Skreiberg
The Irgens playing Monopoly in front of the fire.

Back at the Irgens’ place, it’s Saturday afternoon, and the house is filling up with family, friends and kids. The fire is burning, some are playing Monopoly while some are making gingerbread.

This is a pretty normal feature of the Scandinavian life; coming together and spending time with family and friends, putting some logs on the fire. There is a word for this, familiar to many by now ― “hygge” ― which can be translated as “getting cozy.” The Scandinavian word got its place in the Oxford English Dictionary last year.

Norway Facts And Figures

Total population: 5.25 million (U.S. population: 323 million)

GDP per capita: $70,812 (U.S. GDP per capita: $57,467)

Parental leave: 49 weeks at 100 percent, or 59 weeks at 80 percent. (The U.S. has no national, guaranteed paid parental leave.)

Tax as a percentage of GDP: 19.7 percent (U.S. tax as a percentage of GDP: 15 percent)

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