Norway's Tax Experiment: Boosting Youth Employment

In an unprecedented move, Norway announced plans to assess the effectiveness of tax cuts on employment rates. The government intends to provide annual tax reductions of up to $2,700 to 100,000 randomly chosen individuals born between 1990 and 2005. This initiative, spearheaded by the Labour Party, is part of a broader strategy to address rising social security demands and labor shortages in various sectors.

Finance Minister Jens Stoltenberg and Labour Minister Tonje Brenna have outlined a proposal set to include roughly 8% of workers aged 20 to 35. If given the green light by parliament, this demographic will participate in an academic study aimed at measuring the tax incentives' effectiveness in boosting youth employment. The incentives are projected to cost $49 million annually.

The Finance Ministry emphasized the potential of this measure in generating robust data on tax cuts' impact on employment. The initiative reflects a strategic effort to optimize Norway's $1.8 trillion sovereign wealth fund, the largest globally, to bolster economic participation and growth.

(With inputs from agencies.)