Perhaps the ability to pay high wages has been more dependent on the oil industry than thought earlier. Going forward, the key to success for Norway will be the same as for other countries: We must make the most of our number one resource - labour. The value of Norway’s human capital is around three times the sum of its natural resources, production capital and financial capital.7 Our future welfare level therefore depends on how many are in work and how productive they are. Employment in Norway is no longer as high as it once was. Today, a smaller share of the population aged between 25 and 54 is employed than 20 years ago (Chart 17), and the share is now higher in a number of countries, not least because female employment abroad has also risen. At the same time, the share of adult men in work in Norway has fallen. 7 See Meld. St. 29 (2016-2017), Long-term perspectives for the Norwegian economy 2017. 16  NORGES BANK  Chart 17a No longer at the top of the employment chart. Employment. Share of population aged 25-54.
The oil price fall reduced revenues. At the same time, withdrawals from the fund have become substantially larger, in pace with the increase in the fund. Despite the subsequent downward revision of the expected real return to 3 percent of the value of the fund, we have spent as much oil revenues over the past decade as in the 40 preceding years. The fund was still three times larger towards the end of 20192 than at end-2009, owing to substantial value gains. Almost all the gains have been earned in the past ten years. The krone depreciation accounts for a quarter of the value gains (Chart 5). A weaker exchange rate means that we have to pay more for foreign goods and services, which is why the fund’s value is adjusted for exchange rate effects when measuring the fund’s return. 2 Figures for the GPFG as at 30 September 2019. 5  NORGES BANK  Chart 5 The krone has boosted value gains. Shares of total value gains. 1)  ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  Percent  Exchange rate  GPFG's value gains in international currency  1) At 30 September 2019. Source: Norges Bank  The past ten years have been beneficial for the fund, also in foreign currency terms (Chart 6). The average return has been higher than in the fund’s first years, primarily reflecting a sharp rise in global equity prices. Chart 6 A good decade for the GPFG. Average annual return on the GPFG.