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2019 OECD ECONOMIC SURVEY OF SWEDEN @OECD @OECDeconomy http://www.oecd.org/eco/surveys/economic-survey-sweden.htm
2019 OECD ECONOMIC SURVEY OF SWEDEN
@OECD@OECDeconomy
http://www.oecd.org/eco/surveys/economic-survey-sweden.htm
Key messages
2
• Policies should remain responsive to macroeconomic developments
• Addressing structural weaknesses in housing and business regulations could enhance productivity and well-being
• Reinforcing the school system and maintaining high workforce skills is essential for growth, competitiveness and social cohesion
Output growth is robust
3
Real GDP growth
Source: OECD Economic Outlook database.
-8
-6
-4
-2
0
2
4
6
8
-8
-6
-4
-2
0
2
4
6
8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Y-o-y % changeY-o-y % change
Germany Euro area Sweden United States
Unemployment has declined
4Source: OECD Economic Outlook database.
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
% of labour force
ITA DEU FRA SWE Euro area OECD
Unemployment rate
The employment rate is among the highest in the OECD
5Source: OECD Labour force statistics database.
0
10
20
30
40
50
60
70
80
90
TUR
GRC ITA
MEX
CHL
ESP
BEL
FRA
KOR
LUX
POL
SVK
OECD IR
LIS
RHU
NPR
TUS
ASV
N G7 FIN
LVA
AUT
AUS
CAN
GBR
EST
CZE
NOR
DNK
DEU
NZL
JPN
NLD
SWE
CHE ISL
% of population aged 15-64
The economy is operating close to full capacity
6
1. Percentage of potential output.2. Deviation from 2005-2018 average in units of standard deviation.Source: OECD Economic Outlook database, NIER and Riksbank.
-7.5
-6.0
-4.5
-3.0
-1.5
0.0
1.5
3.0
4.5
6.0
7.5
70
72
74
76
78
80
82
84
86
88
90
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
%% Capacity utilisation in manufacturing industryOutput gap (rhs)¹Resource utilisation (rhs)²
Labour productivity has been growing faster than in most other countries
7
Note: Productivity is measured as GDP per hour worked.Source: OECD, National Accounts, Productivity and Economic Outlook databases.
100
105
110
115
120
125
130
135
140
145
150
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
1995=100
EU28 JPN USAG7 SWE
100
105
110
115
120
125
130
135
140
145
150
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
1995=100
DEU DNK FIN
NLD SWE
Global uncertainties shroud the outlook
8
• Global slowdown
• Trade tensions
• Brexit
• Financial market volatility
Monetary policy remains very expansionary
9
Source: OECD Economic Outlook database and Riksbank.
Policy rates Inflation
Government surpluses largely reflect the strength of the economy
10
1. % of potential GDP.Source: OECD Economic Outlook database.
-2
-1
0
1
2
3
4
-2
-1
0
1
2
3
4
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% of GDP% of GDP
Underlying government net lending¹ Government net lending
Recommendations on macroeconomic policies
11
• Continue to raise interest rates gradually, taking inflation and output developments into account.
• Continue to run budget surpluses while the economy remains solid.
• In the case of a downturn, use the space provided by the fiscal framework.
How’s life in Sweden?
12
Note: This chart shows Sweden’s relative strengths and weaknesses in well-being when compared with other OECD countries. For both positive and negative indicators (such as homicides, marked with an “*”), longer bars always indicate better outcomes (i.e. higher well-being), whereas shorter bars always indicate worse outcomes (i.e. lower well-being). Source: OECD (2017), OECD Better Life Index, www.oecdbetterlifeindex.org.
Perceived corruption is low
13
Note: The Corruption Perceptions Index uses a scale of zero (highly corrupt) to 100 (very clean).Source: Transparency International.
0
10
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
70
80
90
100DN
KNZ
LFI
NSW
ECH
ENO
RNL
DCA
NLU
XDE
UGB
RAU
SAU
TIS
LBE
LES
TIR
LJP
NFR
AUS
ACH
LPR
TIS
RPO
LSV
NCZ
ELV
AES
PKO
R ITA
SVK
HUN
GRC
TUR
MEX
Corruption Perceptions Index, 2018
Income inequality remains low
14
Source: OECD Income Distribution Database (IDD).
Ratio of ninth to first disposable income decile, 2016 or latest
0
1
2
3
4
5
Other Nordics Sweden OECD
Sweden scores well on environmental indicators
15
1. Production-based.Source: OECD Green Growth Indicators database.
CO2 intensity1
0.0
0.1
0.2
0.3
0.4
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Sweden OECDkg/USD, 2010
Environment-related taxes, % of GDP
0%
1%
2%
3%
Sweden OECD (median)
Energy, 2014 Motor vehicles, 2014
Other, 2014 Total, 2000
Recommendations on environmentaland green finance policies
16
• Raise taxes on industrial energy use.
• Strengthen and further harmonise climate-related disclosure requirements, especially for financial intermediaries, including banks.
The housing market has cooled, but prices remain high and structural issues remain
17Source: OECD Economic Outlook database.
50
100
150
200
250
300
350
400
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
1995=100
Canada Norway
Euro area New Zealand
Sweden OECD
Recommendations on housing policy
18
• Reform the recurrent property tax.
• Phase out the deductibility of mortgage interest rate payments.
• Ease rental regulations.
• Simplify land-use planning procedures, balancing economic, environmental and social considerations.
• 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.
Construction costs are high
19
Reading note: Sweden’s construction price level is more than 60% above the OECD averagecompared to less than 40% for the consumer price level.Source: Eurostat.
EU BEL
CZE
DNKDEU
EST
IRL
GRC ESP
FRA
ITALVALTU
LUX
HUN
NLD
AUTPOL
PRT SVN
SVK
FINSWE
GBR
ISL
NORCHE
TUR
0
20
40
60
80
100
120
140
160
180
200
0 20 40 60 80 100 120 140 160 180 200
Construction priceEU28=100
Consumption priceEU28=100
Product market regulations are lean, but further streamlining could raise productivity
20
Source: Preliminary OECD 2018 PMR database (as of 20-02-2019).
0
1
2
3
4
Overall PMR indicator Public ownership Involvement inbusiness operations
Simplification andevaluation ofregulations
Admin. burden onstart-ups
Barriers in service &network sectors
Barriers to trade andinvestment
Sweden OECD average Average of 5 best performing countries Average of 5 worst performing countries
Recommendation on business regulations and competition policies
21
• Continue to use digital tools to improve services, simplify procedures and shorten licences and permits processing times.
Labour market mismatch is increasing
22
Note: An outward (inward) shift of the Beveridge curve over time implies a decrease (increase) in the efficiency oflabour market matching.Source: OECD Registered Unemployed and Job Vacancies dataset and Annual Labour Market Statistics, andStatistics Sweden.
Many jobs are at least partially at risk of automation
23
Note: Jobs are at high risk of automation if the likelihood of their job being automated is at least 70%. Jobsat risk of significant change are those with the likelihood of their job being automated estimated at between50 and 70%.Source: Nedelkoska and Quintini (2018).
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70
NOR
NZL
FIN
SWE
USA
GBR
DNK
NLD
CAN
BEL
IRL
EST
KOR
ISR
OECD AU
T
CZE
FRA
POL
ITA
ESP
SVN
CHL
DEU
JPN
GRC
TUR
LTU
SVK
%%
Risk of significant change (50-70%) High risk of automation (>70%)
The low-skilled receive less training than others
24
Note: Low-skilled adults are defined as people scoring at or below a PIAAC literacy score of 225 points.Source: OECD calculations based on the Survey of Adult skills (PIAAC).
0
10
20
30
40
50
60
70
TUR
GRC ITA
POL
SVK
FRA
JPN
ESP
SVN
KOR
ISR
BEL
CHL
AUT
OECD ES
T
CZE
IRL
DEU
CAN
GBR
USA
SWE
NLD
FIN
NOR
NZL
DNK
All adults Low-skilled adults
Nearly one adult in five lacks some foundation skills
25Source: Musset, P. (2015), “Building Skills for All: A Review of Finland”, OECD Skills Studies.
0% 5% 10% 15% 20% 25% 30% 35% 40%
ItalySpain
FranceUnited States
IrelandPoland
Northern IrelandEnglandCanada
GermanyOECD
AustraliaKorea
DenmarkAustriaEstoniaSweden
Flanders (Belgium)Czech Republic
NorwaySlovak Republic
NetherlandsFinlandJapan
Both low numeracy and literacy
Low numeracy but literacy above level 2
Low literacy but numeracy above level 2
Recommendation on labour market and adult skills policy
26
• Develop adult education, in cooperation with the social partners, including for people in unconventional forms of work.
Quality and equity in Sweden’s schools
School results may have bottomed out, but there is room for improvement
28
Sweden’s test results in international skills surveys for children of school age
Note: PIRLS denotes the national average results of fourth-graders in the Progress in International Reading Literacy Study. TIMSS denotes the national averageresults of eight-graders in the Trends in International Mathematics and Science Study. PISA denotes the national average results of 15-year-olds in the OECDProgramme for International Student Assessment.Source: OECD (2016[4]), Mullis et al. (2017[19]; 2016[20]), and Martin et al. (2016[21]).
450
470
490
510
530
550
570
590
450
470
490
510
530
550
570
590
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Score points in PISA, TIMSS and PIRLS
Score points in PISA, TIMSS and PIRLS
PIRLS (reading) PISA (reading) TIMSS (mathematics)PISA (mathematics) TIMSS (Science) PISA (science)
The school system reinforces societal trendstowards segregation
29
Between-school grade variation controlling for socio-economic background
Note: Grades are grade point averages of 9th grade pupils. Between-school variation is the share of total grade points variation explained by between-school averagegrade points variation.Source: Skolverket (2018[6]).
1990s reforms probably contributed to falling results
30
Difference to PIAAC average by 10-year age cohort
Note: This figure shows that skills in the Swedish population compared to the PIAAC average peaked with the cohorts ending compulsory school (approximately at the age of 15) before the 1990s school reforms.Source: OECD Survey of Adult Skills (2012).
• Strengthening reading, mathematics and science.
• More detailed rules/curriculum, national tests and tougher inspections.
– Makes sense, but increases the administrative burden and may stifle innovation and teacher autonomy at the local level.
• Grants to benefit pupils from weak socio-economic backgrounds and to raise teacher attractiveness.
– Central level involvement warranted, but fragmented system.
• The School commission offers a more holistic approach.
Steps have been taken to rectify the situation, but policies could have been more coherent
31
• Re-instate instruments for (soft) central level coordination.
• Use choice and competition as a force for improvement, while mitigating segregation and other negative side-effects.
• Make teaching a high-status occupation by raising teacher training quality, peer support, and accountability.
Recommendations are mostly in line with those of the School commission.
Recommendations focussing on three areas of reform
32
Targeting of resources to socio-economic needs isinsufficient in many municipalities
33
Note: Negative values indicate higher shortages in schools with low socio-economic status. As reported by school principals.Source: OECD, PISA 2015 Database, Tables II.6.2 and II.6.15.
Shortage of educational staff – difference between advantaged and disadvantaged schools
• Municipalities vary greatly in size, capabilities and political priorities.
• An active approach to school leadership, teaching and accountability can improve results.
• Example: Essunga municipality.
Continuous improvements to teaching and school organisation is not the norm in all municipalities
34
Potential gains from competition and private provision are not realised in Sweden – on average
35Note: Standard deviations change in math scores for a standard deviation change in the exogenous variable.Source: Table 4 in André, Pareliussen and Hwang, forthcoming.
Change in mathematics test score associated with a one standard deviation change in the independent variables
School choice contributes to school segregation
36
Note: The figure shows schools sorted into deciles according to their socio-economic mix of pupils. Schools are not weighted by size.
Source: Author’s calculations based on André, Pareliussen and Hwang (2019[10]).
Private schools attract pupils with favourable backgrounds
Teaching is not seen as a high-status occupation
37Source: OECD, TALIS 2013 Database, Tables 7.2 and 7.2 web.
Percentage of teachers who agree that the teaching profession is valued in society
Teacher appraisals, mentoring and peer-to-peer learning are patchy
38
Share of lower secondary education teachers who report receiving feedback in their current school
Note: Feedback is defined broadly as any communication of the results of a review of an individual’s work, often with the purpose of noting good performance or identifyingareas for development. The feedback may be provided formally or informally.Source: OECD, TALIS 2013 Database, Table 5.4.
Recommendations on education policy
39
A stronger institutional set-up
• Introduce a non-binding minimum norm of school financing, integrated with the national income equalisation system, to better target funding towards disadvantaged groups.
• Develop a regional arm of the central government school governance structure tasked with systematic quality improvement, inducing local cooperation, continuous teacher training and inspections.
Recommendations on education policy (cont.)
40
Steer competition and choice to deliver in line with the public good
• Remove sources of bias in national test grading to create an objective benchmark for school performance, and use it to remove differences in grading leniency.
• Weigh high and low grades symmetrically and suppress the requirement to pass in certain subjects to enter upper secondary education.
• Take the socio-economic mix into account when investing in new schools and in school entry.
Recommendations on education policy (cont.)
41
Teacher quality and standing
• Strengthen teacher education with more instruction time, teacher practice and research.
• Improve continuous learning and development through a regional school governance structure, systematic peer learning and continued mutually beneficial cooperation with universities.
FOR MORE INFORMATION
42
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.
André, C., J. Pareliussen and H. Hwang (2019), What drives the performance of Swedish lower secondary schools?, OECD Economics Department Working Papers, forthcoming.
