Finland has a reputation for being a country with a high cost of living. This reputation can affect the global recruitment efforts of Finnish companies. In this blog post, we’ll explore that topic in more detail.
This blog is inspired by a talk I gave on April 28, 2021, in the Empower Wednesday series of the International Working Women in Finland ry, HUMAK University’s Tempo Project, the Talent Hub Project of Turku Science Park, and Työpiste of the City of Turku. The talk was on salaries in Finland.
One of the questions I received during the Q&A was about salary-level differences between Finland and Estonia. In my answer, I referenced the differences in living costs between the two countries.
I had indeed looked into the consumer price indices very briefly when writing the script of our online course Your Crash Course to Finland. But I hadn’t really done systematic comparisons. This exchange then prompted me to find out how expensive living in Finland actually is.
Cost of living in Finland: a European Comparison
Eurostat allows us to compare consumer prices in Europe in different product categories. Their latest information is from 2019.
For example, consumer prices for food are highest in Switzerland and lowest in Romania. Using the 27-country average as the base, food in Switzerland is 66.1 % more expensive than in the rest of Europe on average. In Romania, in turn, food is 34.6 % less expensive than elsewhere in Europe.
Concerning food, prices in Finland are clearly above the European average. Consumers in Finland pay 17.9 % more for food than Europeans in general.
Other categories included in the Eurostat comparison are:
- restaurant and hotel prices: Finland +33.3 % above the European average
- recreation and culture: +27.1 %
- communications: -0.6 %
- transport services: +21 %
- personal transport equipment: +6.4 %
- furniture and carpets: +3 %
- housing costs: +35 %
- clothing and footwear: +18.2 %
- alcoholic beverages and tobacco: +57.9 %
In these same categories, the most and least expensive European countries in 2019 were:
- restaurant and hotel prices: Iceland +77.2 % and Bulgaria -54.3 %
- recreation and culture: Iceland +58.6 % and Romania -38.5%
- communications: Iceland +111.7 % and Romania -61.8%
- transport services: Norway +55.2 % and Bulgaria -49.4 %
- personal transport equipment: Denmark +38 % and Slovakia -17.7 %
- furniture and carpets: Luxemburg +24.4 % and Bulgaria -50.7 %
- housing costs: Switzerland +93.7 % and Bulgaria -62.8 %
- clothing and footwear: Iceland +38.8% and Bulgaria -23.6 %
- alcoholic beverages and tobacco: Norway 135.6 % and Bulgaria -38 %
In nearly all of these product categories, Finnish price levels were above the European average. With some, as with alcohol, Finland was clearly above. In others, such as in communications, and furniture and carpets, our prices are quite close to the European average.
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Cost of living in Finland: a global comparison
Similarly, we can examine globally collected indices and see how Finnish price levels fare against price levels in various parts of the world.
Compared against price levels in OECD countries, Finnish prices are 14 % higher than the OECD average.
Available resources also allow us to compare Finnish price levels against price levels in individual countries. But rather than start comparing Finnish prices to those of randomly selected countries, let’s focus our examination a bit.
Since I started this conversation with a reference to the global talent attraction efforts of the Finnish government, let’s focus our comparison on countries that are highest in Finnish immigration statistics.
According to Statistics Finland, about 268 000 Finnish residents were citizens of another country at the end of 2019. The top 5 countries in this list were:
Migri’s latest stats, in turn, tell us that the countries from which Finland received the most immigrants within the last year or so were:
We’ll focus on these 7 countries.
The OECD’s monthly comparative price levels allow us to compare Finnish price levels to only a few of these countries. From these data, we learn that consumer prices in Estonia are 32 % lower than in Finland. In Sweden, in turn, they are 3 % higher.
For the non-European countries on our list, these same data are not available. However, other OECD data show that Indian prices are 66 % lower than in OECD countries on average. Russian prices, in turn, are 61 % lower and Chinese prices 29 % lower.
As I mentioned before, Finnish prices are 14 % above the OECD average. Prices in these countries are thus much lower than in Finland.
If we use older data, we get a more detailed comparison.
Cost of living in Finland: a more detailed comparison
The International Comparison Program (ICP) is a worldwide statistical initiative the one purpose of which is to compare price data across the world. Their latest data release is from 2017.
Their price level index (World = 100) shows us that most of our comparison countries have a clearly lower cost of living than Finland.
|Food||Non-alcoholic beverages||Alcoholic beverages, and tobacco||Clothing and footwear||Housing costs||Furnishings||Transport||Communication||Recreation and culture||Hotels and restaurants|
The only exception is our neighbor Sweden. It takes the lead in most of the product categories.
There is no data for Irak.
No matter which data we use, it’s clear that while prices in Finland are not the highest in the world they are up there. Luckily, we are way up there also with the Better Life Index.
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