Young people in the Swedish labour market

There is a high proportion of temporary and part-time employment among young people, as well as relatively high unemployment. An increasing number are neither working nor looking for a job. If these trends continue, there will be serious consequences for the national economy in the near future.

A recently published essay ‘Ungdomars inträde i arbetslivet - följder för individen och arbetsmarknaden’ (‘Young peoples’ entry into the labour market - effects on the individual and the labour market’) in Work life in transition 2003:8 (in Swedish; pdf file) discusses the participation of young people in the labour market. Temporary and part-time employment have become more prevalent, and they experience relatively high levels of unemployment. An increasing number are neither working nor looking for a job.

Employment rate

From 1976 to 2002, the rate of fulltime employment among young people decreased significantly. In 1976, among 16-19 year olds, 50% of men were employed fulltime and about 40% of women. In 2002, the corresponding figures were 10% and 8%, respectively. The change has not been quite so dramatic for those between 20 and 24 years. During the same period, fulltime employment in the 20-24 year age group decreased from about 80% to 50% for men and from 60% to 35% for women.

Prolonging education

According to the author, Ulla Arnell-Gustafsson, the decreasing rate of labour market participation is partly due to people staying longer in the education system. The proportion of 15-19 year olds in education and training grew by about 10% from 1990 to 2001. For the 20-24 year age group, the increase was almost comparable; a greater increase can be observed among women than among men. Spending more time in education usually means postponing entry into the labour market. However, the time spent in higher education leads to improved possibilities for fulltime employment and to a longer working life.

The labour market

As a result of the economic recession in the early 1990s, many sectors of the labour market were reorganised, leading to rationalisations and layoffs. This affected the younger working population to a large extent due to the rule of ‘last one in - first one out’ (Lagen om anställningsskydd).

Developments in the labour market since then have been especially unfavourable to the younger population. The proportion of temporary work has increased to a very high level (Statistics Sweden). Many young people are offered insecure forms of employment, e.g. for a specific project, or contract work, and they are expected to agree to irregular working hours. These kinds of jobs do not generally lead to permanent and fulltime employment. Young people run the risk of getting stuck in jobs with little possibility of advancement.

Distribution of young people by age and type of employment (%)
Distribution of young people by gender, age and employment type
1990 2001 1990 2001
Men Women Men Women Men Women Men Women
16-19 years 20-25 years
Total in the labour force 46 50 27 35 81 79 63 60
Fulltime employed 30 27 10 8 73 57 49 31
Part-time employed 15 26 15 25 5 20 11 26
Temporary contract 42 58 61 66 15 27 30 50
Unemployed 2 3 3 3 3 2 6 4
In education/ training 48 46 58 54 10 12 21 24
Others, incl. ‘inactive’ 2 2 9 9 2 4 8 11

Source: Statistics SwedenUnemployment doubled among 20-25 year olds between 1990 and 2001. A specific group among young people are labelled ‘inactive’. The people in this category are neither working nor actively looking for a job, nor are they in education/training. This group has grown by around 400% since the early 1990s, a rise that has not been explained.

Consequences for the future

If these trends continue, there will be serious consequences for the national economy in the near future. The substantial number of people born in the 1940s are now reaching retirement age and will gradually leave the labour market. This problem is made more acute by the fact that the birth rate has been decreasing since the mid 1970s. A labour market with a number of young people who have limited working experience will make a complex dilemma even more difficult.

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