Sweden is a very egalitarian country but inequalities have risen and some groups are poorly integrated
into the labour market. For growth to become more inclusive, the gap between the cost of labour and
productivity for some groups needs to be reduced, transitions from education to work should be facilitated,
incentives to take a job ought to be strengthened and the non-employed need to be protected against the
risk of falling into unemployment or inactivity traps. This calls for lowering minimum wages relative to the
average wage for groups at risk of becoming unemployed, improving vocational education and training,
and extending the coverage of the unemployment insurance while strengthening obligations for the
unemployed. To address labour market duality risks, the gap in job protection between temporary and
permanent contracts needs to be reduced. Women’s employment is high but the gender wage gap could be
narrowed further by enhancing their employment opportunities.
