In 1990s, Northern European countries made reform on unemployment insurance system. They declined the unemployment insurance treatment, released more strict rules for obtaining treatment, and intensified the supporting force on active labor market policy. Under the effect of all these reform measures, the unemployment rate in Northern countries was decreased to different extent after the mid 1990s and kept at low level after 2000. The paper analyzes the influence degree of social security system reform on employment in five Northern European countries by applying the measurement model. At the end, it comes up with the conclusion that social security expenditure level forms negative correlation relation with employment rate. Unemployment insurance system reform decreases the social security expenditure level, and enhances the employment rate. Key Words: Unemployment Rate, Flexible and Safe, Active Labor Market Policy.