Norway plans $49 million annual tax cut for some young workers

Facing rising social security payments and a shortage of workers in many sectors, successive Norwegian governments have explored ways to boost labour market participation by tweaking rules on state financial support and improving job training.

But Tuesday's proposal by Finance Minister Jens Stoltenberg and Labour Minister Tonje Brenna takes this a step further, offering tax cuts for about 8% of workers between 20 and 35 years of age, while the rest see no change.

If approved by parliament, the group of 100,000 people would become part of an academic study and receive the tax cuts of up to 27,500 Norwegian crowns annually for the next three to five years.

They will be compared with those who do not receive the same cuts. "This will give us strong data on whether such a tax deduction really boosts youth employment, and on how much more or less those who are already in a job will work," the finance ministry said in a statement.

The measure was estimated to cost some 500 million Norwegian crowns ($49 million) per year, the finance ministry said.