P3 Mats Wadman - Labour market and labour market policy in Sweden

Labour market and labour market policy in Sweden Mats WadmanHead of Division of Analysis, PES Sweden25 April 2014

1987 1990 1995 2000 2005 2010 20142

4

6

8

10

12

Activity rate, employment rate

68

70

72

74

76

78

80

82

84

Employment rateActivity rate

Activity rate, employment rate and unemployment ratein Sweden, age range 16-64, period 1987-2014

Change per year, number of persons

19921995

20002005

20102012

20152020

2025-20000

-10000

0

10000

20000

30000

40000

Domestic bornForeign born

Source: PES, SCB

Demographic effect on labour forcedomestic born and foreign born, forecast 2013-2025

Economic growth and labour market• Positive economic development in Sweden comparing to other countries during resent years.

• Strong growth of employment – 275 000 jobs since 2006 (ages 15-74).

– About 70 percent of these jobs went to foreign-born.

– 50 percent of all new jobs was created in Stockholm region (23 percent of Sweden's population).

• Rising unemployment from 7,1 to 8 percent 2006 to 2013 – in Stockholm 6,1 to 6,8 percent.

• Historical strong development of labour supply – increase of 350 000 persons since 2006 - important factor behind the rising unemployment.

Active labour market policy

• Labour market policy is an important part of economic policy.

• The objective “Full employment” shall be reached by measures that

– Stimulate the supply of labour

– Stimulate the demand for labour

– Ensure that matching in the labour market works well.

• “The Swedish model" - an active labour market policy in cooperation with municipalities, organizations and other public agencies which focus on getting the unemployed back to labour force and work - “work line” (arbetslinjen) – avoid long term unemployment.

Various measures taken in recent years for employment and for increasing and strengthen labour supply:• Job tax deduction• Tax deduction for some services - ROT (Repairs, Conversion, Extension) and RUT (Cleaning, Maintenance and Laundry)• Reduced employer taxes for young people

• Increased funding for adult education • Swedish National Agency for Higher Vocational Education was

established (2009)• Investment in higher education – universities and colleges

• Increased investment in infrastructure• Increased government support for municipalities

• New rules in the unemployment insurance system• Change in responsibilities relating to new immigrants (refugees)• Changes in regulations in the health insurance system

Labour market programmes and reforms• Labour market programmes – 4,0 percent of labour force in 2013 (201 000 persons in ages 16-64).

• 68 percent of these in guarantee programmes (started 2007),

- job and development programmes (unemployed 300 days)- youth job programme (unemployed 3 month)

New reforms in area of labour market policy 2010:

• Establishment reform relating to new immigrants (refugees).

• New regulations in the health insurance system – persons with work ability will be tested in a labour market programme (WLI) for re-entry in the labour force.

Focus on increasing supply of labour and reduce reliant on welfare benefits.

Percent of population ages 15-64

Ic e landSw itz er land

SwedenN ether lands

D enmarkN orw ay

GermanyU nited Kingdom

Aus tr iaFin landEs tonia

Latv iaSpain

PortugalL ithuania

C z ec h R epublicFranc e

Slov eniaSlov ak ia

Ire landGreec eBulgar iaBelg iumPoland

H ungaryR omania

Ita lyC roatiaTurk ey

0 10 20 30 40 50 60 70 80

Activity rateEmployment rate

Employment rates and activity rates 2012

Percent of active population ages 15-74

SpainGreec eC roatia

PortugalLatv ia

Ire landSlov ak iaLithuaniaBulgar iaH ungary

Ita lyEs toniaFranc ePoland

Slov eniaTurk ey

U nited StatesSweden

U nited KingdomFin land

Belg iumD enmark

C z ec h R epublicR omania

Ic e landGermany

N ether landsAus tr iaJ apan

N orw ay

0 5 10 15 20 25

Unemployment,totalLong term unemployment

Unemployment and long term unemployment

Thank you