Sweden

This review is the first in a new series on the skills and labour market integration of immigrants and their children. With 16% of its population born abroad, Sweden has one of the larger immigrant populations among the European OECD countries. Estimates suggest that about half of the foreign-born population originally came to Sweden as refugees or as the family of refugees and Sweden has been the OECD country that has had by far the largest inflows of asylum seekers relative to its population. In all OECD countries, humanitarian migrants and their families face greater challenges to integrate into the labour market than other groups. It is thus not surprising that immigrant versus native-born differences are larger than elsewhere, which also must be seen in the context of high skills and labour market participation among the native-born. For both genders, employment disparities are particularly pronounced among the low-educated, among whom immigrants are heavily overrepresented. These immigrants face particular challenges related to the paucity of low-skilled jobs in Sweden, and policy needs to acknowledge that their integration pathway tends to be a long one. Against this backdrop, Sweden has highly developed and longstanding integration policies that mainly aim at upskilling immigrants while temporarily lowering the cost of hiring, while other tools that work more strongly with the social partners and the civil society are less well developed and need strengthening.

Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is the fourth in a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that Sweden has been relatively successful in minimising the adverse effects of displaced workers, manily due to the longstanding tradition of collaboration between the social partners to share responsibility for restructuring by creating special arrangements and practices that provide help to workers much faster that in other OECD countries. Despite this positive institutional framework, there is room to improve policies targeted to displaced workers as remarkable inequalities still exist in both the Swedish labour market and in the way workers are treated. 

Sickness and disability is a key economic policy concern for many OECD countries. Medical conditions, or problems labelled as such by societies and policy systems, are proving an increasing obstacle to raising labour force participation and keeping public expenditure under control. More and more people of working age rely on sickness and disability benefits as their main source of income, and the employment rates of those reporting disabling conditions are low. This report is an assessment of the Swedish reforms, which aim to lower inactivity and increase participation, against the background of recent trends and policy responses in other OECD countries. It looks at what Sweden is currently doing and what more it could do to transform its sickness and disability schemes from passive benefits to active support systems that promote work.