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Sweden 2017 OECD Economic Survey Growing more-equal

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Sweden's output has been lifted by an expanding labour force, investment and a recent pick-up in productivity.Unemployment is receding, although it remains relatively high for vulnerable groups, notably the foreign-born.

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Sweden 2017 OECD Economic Survey Growing more-equal

  1. 1. 2017 OECD ECONOMIC SURVEY OF SWEDEN Growing more equal Stockholm, 8 February 2017 @OECD @OECDeconomy http://www.oecd.org/eco/surveys/economic-survey-sweden.htm
  2. 2. The economy is growing strongly 2 Note: For Denmark, Germany and Sweden, OECD projections for 2016 Q4 Source: OECD Economic Outlook database 90 95 100 105 110 115 120 125 130 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Real GDP Sweden Germany Denmark United States 2005Q1=100
  3. 3. Unemployment is trending down 3 Source: OECD Economic Outlook database 2005 2007 2009 2011 2013 2015 2017 2 4 6 8 10 12 14 16 % of labour force Unemployment rate Sweden Germany Denmark United States
  4. 4. Swedes enjoy a high quality of life 4 1. Each well-being dimension is measured by indicators from the OECD Better Life Indicator set. Indicators are normalised to range between 0 (worst) and 10 (best). Source: OECD Better Life Index database
  5. 5. Real housing prices continue to rise 5 Note: Prices are adjusted by the private consumption deflator Source: OECD Analytical Housing Prices Database 0 50 100 150 200 250 300 2000 2002 2004 2006 2008 2010 2012 2014 2016 2000=100 Spain Canada Sweden Denmark
  6. 6. Gross household debt is high 6 0 20 40 60 80 100 120 140 DEU ITA FRA FIN ESP USA SWE GBR NOR NLD DNK 0 20 40 60 80 100 120 140 NOR DNK SWE FIN DEU NLD GBR FRA ESP USA ITA Note: 2015 or latest Source: OECD Economic Outlook database Households GovernmentGross debt % of GDP Gross debt % of GDP
  7. 7. Inequality is fairly low, but has risen rapidly since the 1990s 7 Source: OECD Income Distribution and Poverty database 0 10 20 30 40 50 60 0 5 10 15 20 25 30 35 40 45 50 ISL NOR DNK SVN FIN CZE BEL SVK AUT NLD SWE LUX HUN DEU FRA CHE POL KOR IRL CAN ITA AUS JPN NZL PRT GRC ESP LVA GBR ISR EST TUR USA MEX CHL IndexIndex Gini coefficient post taxes and transfers (2013 or latest)
  8. 8. Women’s employment rate is almost as high as men’s 8 Source: OECD Labour Force Statistics 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 60 70 80 90 TUR GRC MEX ITA CHL ESP KOR SVK POL HUN IRL BEL OECD FRA LUX SVN PRT CZE USA ISR JPN AUS AUT FIN GBR EST NLD NZL CAN DEU DNK NOR SWE CHE ISL %% Women's employment rate, age 15-64, 2015
  9. 9. 9 Key recommendations – Macroeconomic policies  Gradually withdraw monetary stimulus as inflation rises towards the 2% target.  Continue to pursue prudent fiscal policy, while accommodating temporary immigration-related spending to facilitate integration.
  10. 10. 10 Key recommendations – Housing and household debt  Introduce a cap on household debt-to-income ratios.  Reform the recurrent property tax to better align tax charges with property values. Phase out the deductibility of mortgage interest rate payments.  Enhance co-operation between central and local government in land-use planning and increase incentives for municipalities to facilitate the timely release of development land. Simplify land-use planning procedures, balancing economic, environmental and social considerations.  Ease rental regulations to incentivise rental housing supply, mobility and better utilisation of the housing stock, while maintaining tenant protection against abuse.
  11. 11. INCOME, WEALTH AND EQUAL OPPORTUNITIES 11
  12. 12. The wealthy have prospered 12  Record wealth data for analytical purposes. Median disposable income within each group Source: Statistics Sweden 60 80 100 120 140 160 180 1991 1996 1998 2000 2002 2004 2006 2008 2010 2012 1991=100 Top 5% Bottom 5%
  13. 13. Benefits have been lagging behind 13  Review annually the distributional consequences of raising social benefits, taking equity, fiscal costs and work incentives into consideration. 60 80 100 120 140 160 180 1991 1996 1998 2000 2002 2004 2006 2008 2010 2012 1991=100 Workers Unemployed and sick Source: Statistics Sweden Disposable income within each group
  14. 14. Low skills reduce employment and wages 14  Consolidate wage subsidy schemes for the most vulnerable workers and ease the related administrative burden to increase take-up. Very low skills Moderate to low skills Moderate to high skills Very high skills 10 12 14 16 18 20 50 60 70 80 90 100 Mean hourly wages1 Employment rate, % 1. PPP adjusted USD Source: OECD Survey of Adult Skills (2012) Wages and employment by literacy skill level (2012)
  15. 15. 0.000 0.002 0.004 0.006 0.008 0.010 0.012 0.014 50 90 130 170 210 250 290 330 370 410 Share of graduates PIAAC score points Literacy - upper secondary graduates Natives Migrants from high-income countries Migrants from low-income countries PIAAC level 1 and below Disadvantaged immigrants need special targeting 15  Build on successful experiences at the local level to enhance the efficiency of integration. 1. The PIAAC literacy test was taken in Swedish for all groups Source: OECD Survey of Adult Skills
  16. 16. High immigration poses challenges to integration 16  Continue to simplify the procedures to help migrants get residence and work permits. 0 20 000 40 000 60 000 80 000 100 000 120 000 140 000 160 000 180 000 0 20 000 40 000 60 000 80 000 100 000 120 000 140 000 160 000 180 000 PersonsPersons Labour and students Refugees and family reunions Asylum seekers 1. Excluding free movement immigrants from EEA countries Source: Swedish Migration Agency Gross migrant inflows1
  17. 17. Rental regulations hinder mobility 17  Ease rental regulations to incentivise rental housing supply, mobility and better utilisation of the housing stock, while maintaining tenant protection against abuse.  Consider some prioritisation of low-income households to municipal housing with allocation rules designed to limit spatial segregation. Source: Stockholm Housing Agency. 0 100 000 200 000 300 000 400 000 500 000 600 000 2000 2002 2004 2006 2008 2010 2012 2014 Persons Waiting list for rental housing in Stockholm
  18. 18. 18 Key recommendations – Income inequality and equal opportunities  Review annually the distributional consequences of uprating social benefits, taking equity, fiscal costs and work incentives into consideration.  Continue to simplify the procedures to help migrants get residence and work permits.  Rationalise by merging and harmonising various wage subsidy schemes to better target the most vulnerable workers, ease the related administrative burden and increase take-up.
  19. 19. FIGHTING GENDER INEQUALITY 19
  20. 20. The gender wage gap is significant 20Source: OECD Employment Database 2014 or latest year available 0 5 10 15 20 25 30 35 40 0 5 10 15 20 25 30 35 40 HUN NZL BEL NOR LUX DNK ESP POL ITA GRC SVN IRL DEU FRA SVK ISL SWE OECD CZE CHE CHL PRT GBR USA AUS AUT MEX CAN TUR FIN NLD ISR EST JPN KOR %%
  21. 21. Gender segregation across occupations is substantial 21 Source: OECD Labour Force Statistics  Continue to develop methods to fight stereotypes in education. Address gender-specific weaknesses in education, whether faced by girls or boys. Share of women by main activities 0 10 20 30 40 50 60 70 80 90 Human health and social work activities Education Public administration and defence, Compulsory social security Arts, entertainment and recreation Accommodation and food service activities Financial and insurance activities Administrative and support service activities Wholesale and retail trade, repair of motor vehicles and motorcycles Professional, scientific and technical activities Real estate activities Information and communication Agriculture,hunting and forestry Transportation and storage Industry % Sweden Other Nordics
  22. 22. Only a third of business sole-proprietors are women 22 Source: OECD Entrepreneurship database  Further promote female entrepreneurship through business promotion programmes creating a level playing field irrespective of gender, age or ethnic background. Develop data and analytical tools to evaluate these programmes. Latest year available 0 5 10 15 20 25 30 35 40 45 50 0 10 20 30 40 50 %%
  23. 23. Parental leave is fairly generous 23 Source: OECD Family Database  Encourage parents to split parental leave more equally by continuing to increase the share reserved for each parent. AUS AUT BEL CAN CHL CZE DNK EST FIN FRA DEU HUN ISL ITA JPN KOR LVA LUX NOR POL PRT SVK SVN SWE 0 10 20 30 40 50 60 70 80 90 100 0 5 10 15 20 25 30 35 40 45 OECD average Months % of national average earnings Paid parental and home care leave to mothers
  24. 24. 20 30 40 50 60 70 80 90 20 30 40 50 60 70 80 90 ISL ISR CHE NZL EST PRT CAN NOR LUX GBR AUS HUN SWE DEU CZE AUT USA DNK OECD IRL NLD FIN SVK SVN ESP POL ITA FRA BEL GRC MEX TUR %% Native born Foreign born Employment of foreign-born women is low compared to natives 24 Source: OECD Migration Statistics  Enhance active labour market policy for foreign-born women when the Introduction programme ends, to prevent them from drifting away from the labour market.
  25. 25. 25 Key recommendations – Gender equality  Encourage parents to split parental leave more equally by continuing to increase the share reserved for each parent.  Enhance active labour market policy for foreign-born women when the Introduction programme ends, to prevent them from drifting away from the labour market.
  26. 26. 26 For more information http://www.oecd.org/eco/surveys/economic-survey-sweden.htm OECD OECD Economics Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

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