Unemployment high among young people in Sweden

Unemployment among young people is significantly higher in Sweden than the EU average. Many young graduates seeking employment feel they lack support from the public welfare system. The situation is even worse for those who do not have a university degree. While the government has introduced measures to tackle youth unemployment through the job guarantee scheme, these efforts clash with many of the municipalities’ initiatives.

Reasons for youth unemployment

Sweden has a comparatively low level of unemployment generally: 5.7% among people aged 15–74 years in October 2008. However, unemployment among young people is well above the EU average: 12.5% among those aged 16–24 years (Statistics Sweden news release (in Swedish), October 2008). Many reasons can be cited for the high levels of youth unemployment in Sweden. Since the country has generally high starting salaries and rigid labour legislation, employers feel that they are taking a greater risk by hiring an inexperienced person with no qualifications.

The Swedish National Board for Youth Affairs (Ungdomsstyrelsen) is a government agency that works to protect young people’s rights in society. It claims that employment among young people has declined due to the following factors:

  • an increasing number of young graduates entering the labour market, which leads to a saturated market for the types of jobs that graduates apply for;
  • changes in the labour market situation due to economic recession;
  • unstable employment among young people due to the prevalence of different and more insecure forms of temporary employment and recruitment for people in this age group;
  • Sweden’s labour market regulations, for example the Co-determination Act (Medbestämmandelagen, MBL) and the Employment Protection Act (Lag om anställningsskydd, LAS), which create ‘built-in’ inertia for mobility among the workforce and for new entrants in the labour market – a factor recently mentioned by the Organisation for Economic Co-operation and Development (OECD).

Social partner recommendations

The Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO) is calling for increased measures from the government. In particular, it recommends improved vocational education and training (VET) for young people to tackle the high unemployment levels. LO also wants the government to grant more funding to the Swedish Public Employment Service (Arbetsförmedlingen) to increase their possibilities to find jobs for young people. Moreover, it states that youth unemployment is a consequence of the Swedish class society. At the same time, LO highlights that young people of foreign origin and/or those with lower levels of education are the worst affected by the declining labour market.

Some of these warning signs have been confirmed by the National Board of Health and Welfare (Socialstyrelsen), which states in its 2007 progress report (in Swedish) that an increasing proportion of young people are experiencing poverty. In this case, being poor is mainly attributed to unemployment. Psychological illness has also increased among young people, especially among young women; such illnesses can be a result of unemployment according to a study published in Social Science & Medicine and an article (in Swedish) issued by the Swedish National Board for Youth Affairs among others.

The Swedish Confederation for Professional Employees (Tjänstemännens Centralorganisation, TCO) emphasises the importance of education as a means of tackling youth unemployment. It states that higher education institutions, such as universities, need to increase their student capacities substantially over a 10-year period. TCO also highlights the importance of VET for young adults to improve their status in the labour market.

Government measures

When the social-democratic government was replaced with a centre-right majority government in 2006, the guidelines for the country’s youth unemployment strategy were slightly adjusted. In a government bill (in Swedish) issued by the Ministry of Employment (Arbetsmarknadsdepartementet) in 2007, the centre-right majority government suggests several measures for combating youth unemployment. Among these is an amendment of the upper secondary school system to better fit labour market needs – for example, this could include more focused vocational training. Moreover, the proposal recommends that the two measures regarding youth unemployment – a municipal ‘development guarantee’ (Kommunalt Ungdomsprogram, KUP) and a ‘youth guarantee’ (Ungdomsgarantin, UG) – are replaced with a united measure called a ‘job guarantee for young people’ (jobbgaranti för ungdomar). According to the bill, the reason for the replacement is that the KUP and UG measures have not been successful enough.

Commentary

The job guarantee initiative for young people has helped to combat youth unemployment. However, since municipalities also implement measures to overcome unemployment, these initiatives sometimes clash. As a result, young people involved in the job guarantee scheme may not be able to take part in action programmes organised by the municipalities. Another negative aspect of the job guarantee scheme, which has been highlighted by the social partners, is that young people have to be unemployed for a continuous period of three months before they can take part in any of the measures.

Thomas Brunk, Oxford Research

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