Sweden should address housing shortages, begin integration activities early, and improve the support for those with low skills to speed up the effective integration of refugees, according to a new OECD report.
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.
Both educational attainment and skills, as measured in the OECD Survey of Adult Skills (PIAAC), are high in Sweden. They are not perfect substitutes, but both are to some degree necessary for successfully integrating in the Swedish labour market.
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Sweden’s level of income inequality is low by international standards but has steadily increased since the mid-1980s, faster than in any other OECD country. Reversing the increase in inequality requires a policy package built on three pillars.
Country Notes from OECD Economic Policy Reforms: Going for growth 2011 presenting OECD recommendations for structural reform priorities for individual countries.
After the onset of the crisis, unemployment in Sweden increased markedly, though much less than expected and than during the early 1990s, even as participation in the labour market held up well.
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This note is taken from Chapter 3 of Economic Policy Reforms: Going for Growth 2010.
A High-Level Forum on Sickness, Disability and Work: Addressing Policy Challenges in OECD Countries will be held in Stockholm, Sweden on 14-15 May 2009.