Abstract: The study is trying to identify the most important determinants of unemployment in Nordic countries, where the recent low grow the period in Europe also affected the Nordic economies as well as their labor markets. The study utilized co-integration and error correction model approach. Although, the unit root tests showed that the variables were integrated of different orders, the co-integration result showed that the variables were co-integrated, the regression estimate based on short run and long run ARDL approach models. This study argues that policies tailored to boost effective demand can play an important role in reducing unemployment across Europe as well as improving economic performance, the results show that the gross income distribution, import, long run interest rate, government expenditure has a significant influence on Unemployment rate. Based on these findings, this study recommended that there is still the need for government to take urgent steps against the rising unemployment rate, because unemployment is a major impediment to social progress and results in waste of trained manpower.