Economic Survey of Sweden 2005: Key Challenges
Sweden’s key challenge is to maintain the core of its welfare system despite a greying population. Public finances will be squeezed from several quarters: a higher demand for social services as people get older; a reduction in the share of the population that is working; and ongoing tax pressures caused by globalisation and economic integration in Europe. The most attractive solution is to increase labour supply by reducing sickness absences, raising average hours of work and increasing the employment rates of those groups where participation is still relatively low; a supplementary solution is to improve value for money in public services. The chapter also reviews performance since the crisis of the early 1990s, including the remarkable surge in productivity in the business sector, and discusses why employment has not recovered to its pre crisis level. It concludes by discussing the trade off between equality and other social objectives.
Long abstract
