How resilient is the Swedish labor market in times of globalization, immigration, and technological change?
Recent decades have seen a number of important changes that have the potential of generating substantial repercussions on the Swedish labor market. For example, market integration increased significantly along with Sweden’s entry into the European Union and the accession of China to the WTO. Relative to the size of the country, Sweden has also been among the major immigrant-receiving countries of the world since the mid 1980s. And labor-saving technological progress has continued at a fast rate.
These developments raise a number of research questions. How did the Swedish labor market adjust to these changes? To what extent was unemployment and inequality affected? How has policy affected the adjustment process, and inequality more generally? How has the Swedish institutional environment been affected by the entry into EU? Research within the UCLS addresses questions such as these.
Unemployment and social protection
Unemployment is a major social issue, a fact underlined by the “Great Recession” of 2008/09 and the development during the Corona pandemic of 2020/21. Our research in this area aims at improving the understanding of the mechanisms generating unemployment and social exclusion. We also evaluate policies aimed at increasing employment or reducing the adverse effects of unemployment, and the consequences of employment protection legislation.
Technological change and the labor market
A key question in labor economics is whether the advent of labor-saving technologies hurts labor, in general, and some categories of workers, in particular. For example, technical change during the 1990s and 2000s seems to have been polarizing. In many OECD countries, wage and employment growth have been slower around the median of the distribution than at the top and bottom of the distribution. The more recent development suggests that automation of tasks may also affect the higher-end of the skill distribution. Our research within this area examines the adjustment process for firms and workers following technical change in great detail. It asks whether policy can smoothen the process. And it investigates why firm adopt new technologies.
Labor market institutions and employment relations
The Swedish labor market has a number of distinctive features. First, union density is high (during the second half of the 2000s it declined from 78 to 68 percent, however). Second, many features of employment relationships are regulated via collective agreement rather than labor law. Third, unions play a prominent role in the case of redundancies. Sweden’s entry into the EU raises new issues regarding labor market regulations. Legal acts determined at the EU level are sometimes in conflict with collective agreements. Moreover, it has become increasingly common that disputes in the domestic labor market involve companies or employees from more than one country. These developments raise a number of questions. What are the labor market impacts on EU-driven legal changes in labor law? At what level should labor market be regulated when markets become increasingly integrated?
Earnings, education, and inequality
Educational policy can influence inequality by changing the skill composition of the labor force. By educational policies it may also be possible to break the intergenerational persistence of inequality. Our research sheds new light on how the design of the education system affects labor market outcomes. We also aim to improve the understanding about the sources of intergenerational correlations in earnings.
Immigration, integration, and segregation
During virtually the entire post-war period, net migration rates to Sweden have been positive. During the 1950s and 1960s, the vast majority of migrants came for labor-related reasons. Starting in the mid 1970s, immigrants have mainly come for asylum reasons. Refugee migration to Sweden culminated during the fall of 2015. In 2019, 19.6 percent of the Swedish population was born outside the country. The three largest immigrant source countries are Syria, Iraq, and Finland. Immigrants tend to cluster in big-city areas. Our research on immigration examines the labor market integration process for various groups of immigrants. It examines the impact of policies designed to improve labor market integration. And it asks how integration is affected by segregation.
Political participation and inequality
Structural change in the labor market affects inequality. And changes in inequality may affect political participation and polarization in society. Indeed, some argue that the surges in polarization observed in Sweden, Europe, and the United States are causally linked to increases in inequality. UCLS research in this area probes the link between political participation and inequality. It asks whether political support for the extremes increase in times of economic crises. Moreover, we examine whether education policies and integration policies impact political participation.
Gender, health, and family policies
Gender differences are pervasive on the labor market. In 2019, for example, the wage difference between men and women amounted to 10%. Women are more likely to work part-time: In 2019, 25% of employed prime-aged women worked fewer then 35 hours per week compared to 8.5% if men. It is also well-known that women take the brunt (70%) of parental leave and that they report sick to a greater extent than men. UCLS research in this area, inter alia, examines the impact of parental leave policies, how women and men respond to promotion incentives, and how different kinds of health shocks affect the income prospects for women and men.