OECD Urges Sweden To Fight Job Market Exclusion

Feb. 14, 2007
Joblessness is high among youth and immigrants.

Sweden has strong economic growth but must do more to improve the access of immigrants and youths to the job market and get the sick back to work, the OECD said on Feb. 14. "Joblessness is widespread among immigrants and youngsters, and disability and sickness rates are comparatively high," the Organization for Economic Cooperation and Development said in a report on Sweden's economy.

Despite strong growth "employment rates (among immigrants and the young) have not recovered to traditionally high levels since the crisis of the early 1990s," the economic think tank said.

The Swedish economy had seen a return to form in recent years with annual growth of gross domestic product expected to exceed 4% in 2006. The OECD reiterated its forecasts for GDP growth of 3.6% in 2007 and 2.9% in 2008.

However, while 20% of the population between the ages of 20 and 64 were on state benefits in 2006, compared to 23% in 1993, the figure remained well over the 15% to 16% recorded in 1990-1991, the report said.

A labor market reform launched by the government which took office in October 2006 was expected to have a positive impact on the Swedish economy, the report said. The initiative is aimed at reforming state payments to the unemployed by cutting the amounts, reviewing the qualifying criteria and raising the financial contributions which must people must make to the system. The organization warned however that if the measures were "not sufficient, empirical evidence from other OECD countries would suggest that more flexible wage determination and less strict employment protection are promising routes to combat exclusion."

Sweden was better placed than most OECD countries to face future demographic challenges due to its budget surplus of over 2% of GDP. The OECD said that since the mid-1990s Sweden had had one of the lowest average inflation rates in Europe.

Copyright Agence France-Presse, 2007

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