Why does Norway have the highest standard of living/why are Norwegians so rich?

Question by Lexi J: Why does Norway have the highest standard of living/why are Norwegians so rich?
What are common high earning careers in Norway? Why is it so expensive to live/stay in Oslo? Haha just curious. I always wanted to visit, but everything seems so expensive.

Best answer:

Answer by zirp
oil and gas?

because they don’t spend all their money abroad to show off?

What do you think? Answer below!

Iselin and Jørgen
norway careers

Image by Earphones
Seems to be running a theme…

One comment on “Why does Norway have the highest standard of living/why are Norwegians so rich?

  1. Ah, to just say “oil and gas” would be simple, but alas, an oversimplification.

    Basically the Norwegian GDP and standard of living had been slowly crawling its way up the European positions from the low point in 1900. However, after the oil was found in 1969, the state enjoyed great profits from taxing the oil companies, which the socialist Labour Party government could then again redistribute and as such lubricate the economy. Then, in the 80’s the Norwegian economy had improved enough that the conservative parties found a raised popularity. Their widespread privatization measures stimulated the economy even further. However, the Labour Party got back in power, and in cooperation with private interests formed the cooperative known as Statoil, which today controls 80% of the oil reserves on the Norwegian continental shelf. The profits from Statoil goes to the government, who stores all this in the form of gold in a bank in New York. Why? To avoid flooding the market with money. This would not only devalue the currency, it would cause the “Dutch Disease” and collapse the industrial and agricultural sectors. It proved to be a lucky break, for as they stopped investing right before the dot com crisis, they were punished less than other oil nations such as the UK. The cash reserve also enabled them to avoid every financial crisis since then, including the 2008 one and the Euro Crisis, as it was a simple source of stimulus money. So basically their economy has just kept growing and growing and growing.

    It is so expensive to live/stay in Oslo (or the rest of Norway, for that matter, but especially Oslo) because of heavy unionism. The government encourages trade unions, and hence wages are sky high. As a result, prices are adjusted accordingly. As for the living thing, the lack of financial crises means their East Coast housing bubble has just kept expanding without any crisis to deflate it.

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