Economic Sustainability
#3Key Findings
Sweden performs well in international comparison (rank 3) in the category of economic sustainability.
A 2021 circular economy strategy has been developed into a comprehensive action plan employing several regulatory instruments, some of which have already been adopted. Preparedness and critical infrastructure have been a key focus since Russia’s invasion of Ukraine. Ambitious emissions reduction goals aim for carbon neutrality by 2045.
While unemployment rates have stayed higher than expected, strong incentives for education and comprehensive lifelong learning schemes help push people toward training. The country is extending robust social protections to cover people engaged in nonstandard forms of work.
A tax-system simplification has broadened the tax base. While the country remains one of the OECD’s most egalitarian, inequality is on the rise. Energy and pollution taxes have risen substantially. Both the right and left seek to realize budget surpluses, and public debt has declined consistently in recent years. Research is a strong government priority.
A 2021 circular economy strategy has been developed into a comprehensive action plan employing several regulatory instruments, some of which have already been adopted. Preparedness and critical infrastructure have been a key focus since Russia’s invasion of Ukraine. Ambitious emissions reduction goals aim for carbon neutrality by 2045.
While unemployment rates have stayed higher than expected, strong incentives for education and comprehensive lifelong learning schemes help push people toward training. The country is extending robust social protections to cover people engaged in nonstandard forms of work.
A tax-system simplification has broadened the tax base. While the country remains one of the OECD’s most egalitarian, inequality is on the rise. Energy and pollution taxes have risen substantially. Both the right and left seek to realize budget surpluses, and public debt has declined consistently in recent years. Research is a strong government priority.
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How committed is the government to driving the transition toward a circular economy?
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The government is clearly committed to transitioning to a circular economy.
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The government is largely committed to transitioning to a circular economy.
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The government is somewhat committed to transitioning to a circular economy.
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1
The government is not at all committed to transitioning to a circular economy.
Sweden continues the work it initiated at the beginning of the decade, outlining a vision for a transition to a circular economy. Though some policy instruments are legally binding, most are voluntary at this point.
Sweden is a party to the EU’s Green Deal and the action plan for a circular economy issued in 2020. The action plan targets over 30 measures and includes a framework for sustainable production design, increasing consumer power, targeting key sectors, and decreasing waste (Europeiska Rådet, 2024).
In 2021, the government published a strategy for the transition toward a circular economy. The overarching target of the strategy was to contribute to reaching the environmental – and global – targets in the Agenda 2030. The strategy’s vision is “a society where resources are used efficiently in toxin-free circular flows that replace virgin materials” (Regeringskansliet, 2021a).
Four areas are highlighted: (i) circular economy through sustainable production and product design; (ii) circular economy through sustainable consumption and use of materials, products, and services; (iii) circular economy through toxin-free and circular cycles; and (iv) circular economy that incentivizes the business sector and other actors through measures that encourage innovation and circular business models (Government Offices of Sweden, 2021a).
The government has developed a comprehensive action plan based on the strategy’s four focus areas, employing several regulatory instruments, some of which have already been adopted (Government Offices of Sweden, 2021b). The strategy and action plan are divided into specific strategies targeting different themes: plastic, textiles, food, renewable and biobased raw materials, construction, the real estate sector, and innovation in critical metals and minerals (Geerken, Manoochehri & Di Francesco, 2022). The government has also drafted a specific strategy for plastic, comprising 55 measures designed to mitigate the environmental and climate effects (Government Offices of Sweden, 2021c).
The strategy and action plans are developed in accordance with the national environmental interim targets, which serve as indicators to measure progress (see section P17 Effective Climate Action for information about the interim targets).
The strategy and action plans are not binding but are reviewed in the budget proposition in the same way as national environmental targets. Involved stakeholders, such as agencies, regions, and municipalities, have been commissioned to follow the development. However, legally binding measures are being taken for the different themes in the action plan. In relation to waste management, for example, seven new rules concerning municipal waste management were implemented in 2024, with measures such as mandatory sorting of non-liquefied food waste and liquefied grease and separating the content from the packing (Avfall Sverige, 2024).
The central actors in the transition are the government and the Riksdag, the EU, the business sector, the public sector and civil society. The Ministry of Climate and Enterprise is the lead unit responsible for matters concerning climate and the environment, but numerous actors are involved in the transition toward a circular environment. These include the Swedish Environmental Protection Agency, the Swedish Agency for Economic and Regional Growth, the Swedish Consumer Agency, Vinnova, the state research council Formas, universities and research institutes, municipalities, and regions.
Citations:
Avfall Sverige. 2024. “Ny lagstiftning 2024.” https://www.avfallsverige.se/aktuellt/nyheter/ny-lagstiftning-2024/
Europeiska rådet. 2024. “Den cirkulära ekonomin.” https://www.consilium.europa.eu/sv/policies/circular-economy/#ceap
Geerken, T., Manoochehri, S., and Di Francesco, E. 2022. “Circular Economy Policy Innovation and Good Practice in the Member States.” European Environment Agency, European Topic Centre, Circular Economy and Resource Use https://www.eionet.europa.eu/etcs/etc-ce/products/draft-report-for-dg-env_final.pdf
Government Offices of Sweden. 2021a. Cirkulär ekonomi – strategi för omställningen i Sverige. Stockholm: Miljödepartementet.
Government Offices of Sweden. 2021b. Cirkulär ekonomi – handlingsplan för omställningen av Sverige. Stockholm: Miljödepartementet.
Government Offices of Sweden. 2021c. Sveriges handlingsplan för plast – En del av den cirkulära ekonomin. Stockholm: Miljödepartementet.
Sweden is a party to the EU’s Green Deal and the action plan for a circular economy issued in 2020. The action plan targets over 30 measures and includes a framework for sustainable production design, increasing consumer power, targeting key sectors, and decreasing waste (Europeiska Rådet, 2024).
In 2021, the government published a strategy for the transition toward a circular economy. The overarching target of the strategy was to contribute to reaching the environmental – and global – targets in the Agenda 2030. The strategy’s vision is “a society where resources are used efficiently in toxin-free circular flows that replace virgin materials” (Regeringskansliet, 2021a).
Four areas are highlighted: (i) circular economy through sustainable production and product design; (ii) circular economy through sustainable consumption and use of materials, products, and services; (iii) circular economy through toxin-free and circular cycles; and (iv) circular economy that incentivizes the business sector and other actors through measures that encourage innovation and circular business models (Government Offices of Sweden, 2021a).
The government has developed a comprehensive action plan based on the strategy’s four focus areas, employing several regulatory instruments, some of which have already been adopted (Government Offices of Sweden, 2021b). The strategy and action plan are divided into specific strategies targeting different themes: plastic, textiles, food, renewable and biobased raw materials, construction, the real estate sector, and innovation in critical metals and minerals (Geerken, Manoochehri & Di Francesco, 2022). The government has also drafted a specific strategy for plastic, comprising 55 measures designed to mitigate the environmental and climate effects (Government Offices of Sweden, 2021c).
The strategy and action plans are developed in accordance with the national environmental interim targets, which serve as indicators to measure progress (see section P17 Effective Climate Action for information about the interim targets).
The strategy and action plans are not binding but are reviewed in the budget proposition in the same way as national environmental targets. Involved stakeholders, such as agencies, regions, and municipalities, have been commissioned to follow the development. However, legally binding measures are being taken for the different themes in the action plan. In relation to waste management, for example, seven new rules concerning municipal waste management were implemented in 2024, with measures such as mandatory sorting of non-liquefied food waste and liquefied grease and separating the content from the packing (Avfall Sverige, 2024).
The central actors in the transition are the government and the Riksdag, the EU, the business sector, the public sector and civil society. The Ministry of Climate and Enterprise is the lead unit responsible for matters concerning climate and the environment, but numerous actors are involved in the transition toward a circular environment. These include the Swedish Environmental Protection Agency, the Swedish Agency for Economic and Regional Growth, the Swedish Consumer Agency, Vinnova, the state research council Formas, universities and research institutes, municipalities, and regions.
Citations:
Avfall Sverige. 2024. “Ny lagstiftning 2024.” https://www.avfallsverige.se/aktuellt/nyheter/ny-lagstiftning-2024/
Europeiska rådet. 2024. “Den cirkulära ekonomin.” https://www.consilium.europa.eu/sv/policies/circular-economy/#ceap
Geerken, T., Manoochehri, S., and Di Francesco, E. 2022. “Circular Economy Policy Innovation and Good Practice in the Member States.” European Environment Agency, European Topic Centre, Circular Economy and Resource Use https://www.eionet.europa.eu/etcs/etc-ce/products/draft-report-for-dg-env_final.pdf
Government Offices of Sweden. 2021a. Cirkulär ekonomi – strategi för omställningen i Sverige. Stockholm: Miljödepartementet.
Government Offices of Sweden. 2021b. Cirkulär ekonomi – handlingsplan för omställningen av Sverige. Stockholm: Miljödepartementet.
Government Offices of Sweden. 2021c. Sveriges handlingsplan för plast – En del av den cirkulära ekonomin. Stockholm: Miljödepartementet.
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How committed is the government to updating and protecting critical infrastructure?
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The government is clearly committed to updating basic technical infrastructure.
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The government is largely committed to updating basic technical infrastructure.
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The government is somewhat committed to updating basic technical infrastructure.
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The government is not at all committed to updating basic technical infrastructure.
Preparedness and the protection of critical infrastructure have been at the forefront of governmental discussions for some time, particularly in the two years since Russia invaded Ukraine. This invasion led to the end of the policy of non-alliance and Sweden’s NATO membership.
One key aspect of the government’s commitment is the development of comprehensive risk management frameworks and collaboration with relevant stakeholders, including private sector entities and international partners. The protection of critical infrastructure in terms of cybersecurity, information security, and communication systems largely falls under the purview of MSB (Myndigheten för samhällsskydd och beredskap). MSB reports on how national policy on critical infrastructure protection aligns with EU policy (Government Offices of Sweden, 2020; MSB n.d.).
Government efforts have focused on cybersecurity, partly due to the high degree of digitalization of services in both the public and private sectors. Other types of critical infrastructure have suffered from chronic underfunding. For instance, the lack of investment in railway infrastructure, combined with increased demand, has brought the system to its knees with delays and frequent cancellations; accidents have also occurred.
Citations:
Government Offices of Sweden. 2020. “EU:s strategi för säkerhetsunionen.”
MSB. (n.d.). https://www.msb.se/en/
One key aspect of the government’s commitment is the development of comprehensive risk management frameworks and collaboration with relevant stakeholders, including private sector entities and international partners. The protection of critical infrastructure in terms of cybersecurity, information security, and communication systems largely falls under the purview of MSB (Myndigheten för samhällsskydd och beredskap). MSB reports on how national policy on critical infrastructure protection aligns with EU policy (Government Offices of Sweden, 2020; MSB n.d.).
Government efforts have focused on cybersecurity, partly due to the high degree of digitalization of services in both the public and private sectors. Other types of critical infrastructure have suffered from chronic underfunding. For instance, the lack of investment in railway infrastructure, combined with increased demand, has brought the system to its knees with delays and frequent cancellations; accidents have also occurred.
Citations:
Government Offices of Sweden. 2020. “EU:s strategi för säkerhetsunionen.”
MSB. (n.d.). https://www.msb.se/en/
Graph View
How committed is the government to fully decarbonizing the energy system by 2050?
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The government is clearly committed to transitioning to a decarbonized energy system.
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The government is largely committed to transitioning to a decarbonized energy system.
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The government is somewhat committed to transitioning to a decarbonized energy system.
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The government is not at all committed to transitioning to a decarbonized energy system.
Environmental policy surfaced on the political agenda in the 1970s, coinciding with the establishment of the Environmental Party [Miljöpartiet De Gröna]. Since then, environmental issues, including energy transitions, have remained prominent. With its history as a high-energy-consuming industrial economy, Sweden undoubtedly faces significant challenges, but it has set ambitious goals for emissions reductions. Much of this effort occurs at the urban level.
Energy issues fall under the jurisdiction of the Swedish Energy Agency and the Swedish Environmental Protection Agency. Both public agencies have developed detailed plans for a sustainable energy transition. The Swedish Energy Agency released its 2025 – 2028 strategic priorities in research and innovation, which include technology and sustainable value chains for energy transition, accelerated transition through system demonstrators and business development for accelerated energy transition, a resilient and robust energy system, increased competence for energy transition, governance, and conflicting objectives and pathways for the energy system (Energimyndigheten, 2024). The agency places a pronounced emphasis on renewable energy sources.
In the restructuring of the funding agencies, research funding for the Swedish Energy Agency is discontinued. About 30% of electricity production is generated by nuclear plants – six reactors in three plants, currently planned to run until 2040 (Strålsäkerhetsmyndigheten, 2024). The current government is planning to further expand nuclear plants.
Sweden aims to be carbon neutral by 2045. The Swedish Environmental Protection Agency has a detailed plan with constituent targets to achieve this goal (see https://www.sverigesmiljomal.se). These targets are non-binding but are part of the climate framework, which includes legislation, goals, and an advisory board that lend significant political weight to the issue (Naturvårdsverket, 2023). However, the current right-wing government tends to have a more permissive attitude toward climate issues.
Citations:
Energimyndigheten. “Strategic priorities in energy research and innovation 2025-2028.” https://energimyndigheten.a-w2m.se/Home.mvc?ResourceId=219218
Naturvårdsverket. 2024. “Sveriges klimatmål och klimatpolitiska ramverk.” https://www.naturvardsverket.se/amnesomraden/klimatomstallningen/sveriges-klimatarbete/sveriges-klimatmal-och-klimatpolitiska-ramverk/
Strålsäkerhetsmyndigheten. 2024. “Kärnkraft.” https://www.stralsakerhetsmyndigheten.se/omraden/karnkraft/
Energy issues fall under the jurisdiction of the Swedish Energy Agency and the Swedish Environmental Protection Agency. Both public agencies have developed detailed plans for a sustainable energy transition. The Swedish Energy Agency released its 2025 – 2028 strategic priorities in research and innovation, which include technology and sustainable value chains for energy transition, accelerated transition through system demonstrators and business development for accelerated energy transition, a resilient and robust energy system, increased competence for energy transition, governance, and conflicting objectives and pathways for the energy system (Energimyndigheten, 2024). The agency places a pronounced emphasis on renewable energy sources.
In the restructuring of the funding agencies, research funding for the Swedish Energy Agency is discontinued. About 30% of electricity production is generated by nuclear plants – six reactors in three plants, currently planned to run until 2040 (Strålsäkerhetsmyndigheten, 2024). The current government is planning to further expand nuclear plants.
Sweden aims to be carbon neutral by 2045. The Swedish Environmental Protection Agency has a detailed plan with constituent targets to achieve this goal (see https://www.sverigesmiljomal.se). These targets are non-binding but are part of the climate framework, which includes legislation, goals, and an advisory board that lend significant political weight to the issue (Naturvårdsverket, 2023). However, the current right-wing government tends to have a more permissive attitude toward climate issues.
Citations:
Energimyndigheten. “Strategic priorities in energy research and innovation 2025-2028.” https://energimyndigheten.a-w2m.se/Home.mvc?ResourceId=219218
Naturvårdsverket. 2024. “Sveriges klimatmål och klimatpolitiska ramverk.” https://www.naturvardsverket.se/amnesomraden/klimatomstallningen/sveriges-klimatarbete/sveriges-klimatmal-och-klimatpolitiska-ramverk/
Strålsäkerhetsmyndigheten. 2024. “Kärnkraft.” https://www.stralsakerhetsmyndigheten.se/omraden/karnkraft/
Graph View
To what extent do existing labor market institutions support or hinder the transition to an adaptive labor market?
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Labor market institutions are fully aligned with the goal of an adaptable labor market.
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Labor market institutions are largely aligned with the goal of an adaptable labor market.
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Labor market institutions are only somewhat aligned with the goal of an adaptable labor market.
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1
Labor market institutions are not at all aligned with the goal of an adaptable labor market.
The purpose of Swedish labor market policy is threefold. It aims to provide work opportunities for citizens, supply labor to employers, and assist those struggling to find employment.
“`Despite earlier predictions that unemployment would decrease to 6.7% in 2023 (Konjunkturinstitutet 2021), it remained relatively high at 8.5% (SCB 2024a). Nonetheless, the percentages of full-time employment and the employment of people born outside Sweden have increased significantly (SCB 2024b). Both part-time employment and the employment of people born outside Sweden have been problematic issues in the past.“`
In the aftermath of the pandemic, professions in IT, education, and social work show more potential for mobility, while employees in transportation, manufacturing, and maintenance services have more constrained mobility opportunities (Arbetsförmedlingen, 2022).
In order to promote lifelong learning and professional mobility, the government announced a “transformation package” [omställningspaket] with, among other provisions, subsidies for mid-career individuals who choose to return to school or change careers (Government Offices of Sweden, 2022). According to recent EU data, Sweden is the “top performer” in the EU, with more than a third of adults participating in lifelong learning schemes in 2021 (Eurostat 2023).
Citations:
Arbetsförmedlingen. 2022. Yrkesmobilitet på den svenska arbetsmarknaden: en analys av olika yrkesgruppers förutsättningar för rörlighet. https://arbetsformedlingen.se/download/18.3f29801717d5618f8df6231/1642161909624/ykesmobilitet-pa-den-svenska-arbetsmarknaden.pdf
Eurostat. 2023. “Participation in lifelong learning increases in 2021.” https://ec.europa.eu/eurostat/web/products-eurostat-news/-/edn-20230130-1
Government Offices of Sweden. 2022. “Frågor och svar om regeringens omställningspaket.” https://www.regeringen.se/artiklar/2022/06/fragor-och-svar-om-regeringens-omstallningspaket/
Konjunkturinstitutet (NIER). 2021. “Konjunkturläget, December 2021.” https://www.konj.se/download/18.10535f7c17db81574dd3f47b/1640074614038/KLDec2021.pdf
SCB [Statistikmyndigheten]. 2024a. “Arbetskraftsundersökningarna.” https://www.scb.se/AM0401
SCB [Statistikmyndigheten]. 2024b. “Avmatting på arbetsmarknaden under 2023.” https://www.scb.se/hitta-statistik/statistik-efter-amne/arbetsmarknad/arbetskraftsundersokningar/arbetskraftsundersokningarna-aku/pong/statistiknyhet/arbetskraftsundersokningarna-aku-20233/
“`Despite earlier predictions that unemployment would decrease to 6.7% in 2023 (Konjunkturinstitutet 2021), it remained relatively high at 8.5% (SCB 2024a). Nonetheless, the percentages of full-time employment and the employment of people born outside Sweden have increased significantly (SCB 2024b). Both part-time employment and the employment of people born outside Sweden have been problematic issues in the past.“`
In the aftermath of the pandemic, professions in IT, education, and social work show more potential for mobility, while employees in transportation, manufacturing, and maintenance services have more constrained mobility opportunities (Arbetsförmedlingen, 2022).
In order to promote lifelong learning and professional mobility, the government announced a “transformation package” [omställningspaket] with, among other provisions, subsidies for mid-career individuals who choose to return to school or change careers (Government Offices of Sweden, 2022). According to recent EU data, Sweden is the “top performer” in the EU, with more than a third of adults participating in lifelong learning schemes in 2021 (Eurostat 2023).
Citations:
Arbetsförmedlingen. 2022. Yrkesmobilitet på den svenska arbetsmarknaden: en analys av olika yrkesgruppers förutsättningar för rörlighet. https://arbetsformedlingen.se/download/18.3f29801717d5618f8df6231/1642161909624/ykesmobilitet-pa-den-svenska-arbetsmarknaden.pdf
Eurostat. 2023. “Participation in lifelong learning increases in 2021.” https://ec.europa.eu/eurostat/web/products-eurostat-news/-/edn-20230130-1
Government Offices of Sweden. 2022. “Frågor och svar om regeringens omställningspaket.” https://www.regeringen.se/artiklar/2022/06/fragor-och-svar-om-regeringens-omstallningspaket/
Konjunkturinstitutet (NIER). 2021. “Konjunkturläget, December 2021.” https://www.konj.se/download/18.10535f7c17db81574dd3f47b/1640074614038/KLDec2021.pdf
SCB [Statistikmyndigheten]. 2024a. “Arbetskraftsundersökningarna.” https://www.scb.se/AM0401
SCB [Statistikmyndigheten]. 2024b. “Avmatting på arbetsmarknaden under 2023.” https://www.scb.se/hitta-statistik/statistik-efter-amne/arbetsmarknad/arbetskraftsundersokningar/arbetskraftsundersokningarna-aku/pong/statistiknyhet/arbetskraftsundersokningarna-aku-20233/
To what extent do existing labor market institutions support or hinder the transition to an inclusive labor market?
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Labor market institutions are fully aligned with the goal of an inclusive labor market.
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Labor market institutions are largely aligned with the goal of an inclusive labor market.
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Labor market institutions are only somewhat aligned with the goal of an inclusive labor market.
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1
Labor market institutions are not at all aligned with the goal of an inclusive labor market.
Despite slightly decreasing inflation from more than 10% at the end of 2022 to 3.5% in November 2023, Sweden experienced a mild recession in 2023, which is expected to end in 2024. The labor market withstood economic pressures, as unemployment rose slightly in 2023; a further modest increase is estimated for 2024 (Konjunkturinstitutet, 2023a).
In the first part of 2023, for the first time in many years, employment rates among people born outside Sweden have significantly increased, although the trend began just before the pandemic. While some of this increase can be attributed to data generation methods, the long-term trend is explained by a stronger labor market (Konjunkturinstitutet, 2023a). The employment rate for people born outside Sweden rose by four percentage points in 2022 alone (Konjunkturinstitutet, 2023b).
Strong incentives for education and comprehensive lifelong learning schemes contribute to a low NEET rate (6.8% in 2022, the second lowest rate in the EU) (Ekonomifakta, 2023). Finally, there is a debate to re-evaluate rules and regulations for working from home, which may further increase integration into the labor market.
Citations:
Ekonomifakta. 2023. “NEET – Utanförskap bland unga.” https://www.ekonomifakta.se/Fakta/Arbetsmarknad/Arbetsloshet/neet-utanforskap-bland-unga/
Konjunkturinstitutet. 2023a. “Konjunkturläget.” https://www.konj.se/download/18.e8ef5d618c8082c058119f2/1706692715038/Konjunkturlaget-December-2023.pdf
Konjunkturinstitutet. 2023b. “Utrikes föddas uppåtgående sysselsättning: Hur mycket förklaras av demografi?” https://www.konj.se/download/18.5bab959718c38c02b1e6ddbe/1702382843572/2023-12-13%20Sysselsättning%20utrikes%20födda.pdf
In the first part of 2023, for the first time in many years, employment rates among people born outside Sweden have significantly increased, although the trend began just before the pandemic. While some of this increase can be attributed to data generation methods, the long-term trend is explained by a stronger labor market (Konjunkturinstitutet, 2023a). The employment rate for people born outside Sweden rose by four percentage points in 2022 alone (Konjunkturinstitutet, 2023b).
Strong incentives for education and comprehensive lifelong learning schemes contribute to a low NEET rate (6.8% in 2022, the second lowest rate in the EU) (Ekonomifakta, 2023). Finally, there is a debate to re-evaluate rules and regulations for working from home, which may further increase integration into the labor market.
Citations:
Ekonomifakta. 2023. “NEET – Utanförskap bland unga.” https://www.ekonomifakta.se/Fakta/Arbetsmarknad/Arbetsloshet/neet-utanforskap-bland-unga/
Konjunkturinstitutet. 2023a. “Konjunkturläget.” https://www.konj.se/download/18.e8ef5d618c8082c058119f2/1706692715038/Konjunkturlaget-December-2023.pdf
Konjunkturinstitutet. 2023b. “Utrikes föddas uppåtgående sysselsättning: Hur mycket förklaras av demografi?” https://www.konj.se/download/18.5bab959718c38c02b1e6ddbe/1702382843572/2023-12-13%20Sysselsättning%20utrikes%20födda.pdf
To what extent do existing labor market institutions support or hinder the mitigation of labor market risks?
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Labor market institutions are fully aligned with the goal of protecting individuals against labor market risks.
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Labor market institutions are largely aligned with the goal of protecting individuals against labor market risks.
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Labor market institutions are only somewhat aligned with the goal of protecting individuals against labor market risks.
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1
1
Labor market institutions are not at all aligned with the goal of protecting individuals against labor market risks.
In Sweden, policies and regulations generally provide robust social protection for workers, aiming to extend existing social insurance schemes to previously excluded worker categories and adapt them to non-standard forms of work. The country’s welfare system is comprehensive and inclusive, encompassing various social insurance programs such as unemployment benefits, sickness benefits, parental leave, and healthcare.
Efforts have been made to ensure that workers in non-standard employment arrangements, such as part-time workers, temporary workers, and self-employed individuals, have access to these social protections. Major features of Sweden’s social insurance policies include the separation of spouses’ income and individual taxation, the expansion of public and private day care centers, and a very generous parental leave program provided to both women and men, which has created much better possibilities to combine a professional career with parenthood (Dufvander and Löfgren, 2020).
The basic difference between the social democratic and green parties, on one hand, and the center-right parties, on the other, is that the former emphasize gender equality, whereas the latter emphasize freedom of choice. Both blocs, however, are fully committed to the overarching goals of family policy and see it as integral to promoting gender equality.
Additionally, reforms have been introduced to address gaps in social protection for workers in non-standard employment, such as the introduction of income-related unemployment benefits for part-time workers (Försäkringskassan, 2024).
Regarding employment protection legislation, Sweden ranks below the average for all OECD countries in terms of temporary contracts. However, concerning employment protection for regular workers, Sweden ranked in the top third of all OECD countries in 2019, the year with the latest available data (OECD 2020).
Sweden has established mechanisms to facilitate the transfer of social insurance benefits and pensions for individuals who move among different jobs, sectors, or countries. Additionally, within the European Union, Sweden adheres to regulations that guarantee the portability of social security benefits for EU citizens working or residing in different member states.
Overall, while Sweden’s policies and regulations provide extensive social protection for workers and strive to address the needs of those in non-standard employment arrangements, there may still be areas for improvement, particularly regarding the effectiveness of measures ensuring the portability of social rights across diverse employment contexts.
Citations:
Duvander, A-Z., and Löfgren, N. 2020. “Sweden Country Note.” In Koslowski, A., Blum, S., Dobrotić, I., Kaufman, G., and Moss, P. eds. “International Review of Leave Policies and Research 2020.” http://www.leavenetwork.org/lp_and_r_reports/
Försäkringskassan. 2024. “Social insurance system.” https://www.forsakringskassan.se/english/moving-to-working-studying-or-newly-arrived-in-sweden/social-insurance-system
OECD. 2020. “OECD Employment Outlook, Chapter 3: Recent Trends in Employment Protection Legislation.”
Efforts have been made to ensure that workers in non-standard employment arrangements, such as part-time workers, temporary workers, and self-employed individuals, have access to these social protections. Major features of Sweden’s social insurance policies include the separation of spouses’ income and individual taxation, the expansion of public and private day care centers, and a very generous parental leave program provided to both women and men, which has created much better possibilities to combine a professional career with parenthood (Dufvander and Löfgren, 2020).
The basic difference between the social democratic and green parties, on one hand, and the center-right parties, on the other, is that the former emphasize gender equality, whereas the latter emphasize freedom of choice. Both blocs, however, are fully committed to the overarching goals of family policy and see it as integral to promoting gender equality.
Additionally, reforms have been introduced to address gaps in social protection for workers in non-standard employment, such as the introduction of income-related unemployment benefits for part-time workers (Försäkringskassan, 2024).
Regarding employment protection legislation, Sweden ranks below the average for all OECD countries in terms of temporary contracts. However, concerning employment protection for regular workers, Sweden ranked in the top third of all OECD countries in 2019, the year with the latest available data (OECD 2020).
Sweden has established mechanisms to facilitate the transfer of social insurance benefits and pensions for individuals who move among different jobs, sectors, or countries. Additionally, within the European Union, Sweden adheres to regulations that guarantee the portability of social security benefits for EU citizens working or residing in different member states.
Overall, while Sweden’s policies and regulations provide extensive social protection for workers and strive to address the needs of those in non-standard employment arrangements, there may still be areas for improvement, particularly regarding the effectiveness of measures ensuring the portability of social rights across diverse employment contexts.
Citations:
Duvander, A-Z., and Löfgren, N. 2020. “Sweden Country Note.” In Koslowski, A., Blum, S., Dobrotić, I., Kaufman, G., and Moss, P. eds. “International Review of Leave Policies and Research 2020.” http://www.leavenetwork.org/lp_and_r_reports/
Försäkringskassan. 2024. “Social insurance system.” https://www.forsakringskassan.se/english/moving-to-working-studying-or-newly-arrived-in-sweden/social-insurance-system
OECD. 2020. “OECD Employment Outlook, Chapter 3: Recent Trends in Employment Protection Legislation.”
Graph View
To what extent do existing tax institutions and procedures support or hinder adequate tax revenue flows?
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9
9
The tax system is fully aligned with the goals of ensuring adequate tax revenues.
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7
6
7
6
The tax system is largely aligned with the goals of ensuring adequate tax revenues.
5
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3
4
3
The tax system is only somewhat aligned with the goals of ensuring adequate tax revenues.
2
1
1
The tax system is not at all aligned with the goals of ensuring adequate tax revenues.
Tax policy is no longer a major impediment to the competitiveness of Swedish businesses. The administrative capacity for levying and collecting taxes is very high, with efficient, digitalized services. The agencies handling tax issues are the Swedish Tax Agency and the Swedish Economic Crime Authority.
Current levels of business taxation are low from a comparative perspective. There are innovation incentives in the form of R&D grants and regional and tax incentives for international businesses relocating to Sweden (Business Sweden, 2022). In 2024, tax revenues are projected to balance the budgets of municipalities as well as reduce any deficits at the national level (Konjunkturinstitutet, 2023).
Citations:
Business Sweden. 2022. “Incentives Guide 2022: For Companies Looking to Invest in Sweden.” https://www.business-sweden.com/globalassets/services/learning-center/establishment-guides/incentives-guide-2022.-pdf
Konjunkturinstitutet. 2023. “Konjunkturläget: December 2023.” https://www.konj.se/download/18.e8ef5d618c8082c058119f2/1706692715038/Konjunkturlaget-December-2023.pdf
Current levels of business taxation are low from a comparative perspective. There are innovation incentives in the form of R&D grants and regional and tax incentives for international businesses relocating to Sweden (Business Sweden, 2022). In 2024, tax revenues are projected to balance the budgets of municipalities as well as reduce any deficits at the national level (Konjunkturinstitutet, 2023).
Citations:
Business Sweden. 2022. “Incentives Guide 2022: For Companies Looking to Invest in Sweden.” https://www.business-sweden.com/globalassets/services/learning-center/establishment-guides/incentives-guide-2022.-pdf
Konjunkturinstitutet. 2023. “Konjunkturläget: December 2023.” https://www.konj.se/download/18.e8ef5d618c8082c058119f2/1706692715038/Konjunkturlaget-December-2023.pdf
To what extent do existing tax institutions and procedures consider equity aspects?
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9
9
The tax system is fully aligned with the goal of ensuring equity.
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7
6
7
6
The tax system is largely aligned with the goal of ensuring equity.
5
4
3
4
3
The tax system is only somewhat aligned with the goal of ensuring equity.
2
1
1
The tax system is not at all aligned with the goal of ensuring equity.
Horizontal equity in tax policy has improved in recent years. Simplification of the tax system, including fewer deductible items, has broadened the overall tax base. This improvement in horizontal equity results from a combination of a less progressive tax rate and an overall reduction in taxes.
Vertical inequity has increased significantly over the past decade (OECD 2015; 2022). While the country remains one of the more egalitarian in the OECD, the trend of rising inequality persists. One way to counteract this trend is to improve the redistribution effectiveness of the tax and benefit system.
A recent report suggests that the tax system would also benefit from incorporating a gender perspective, arguing that gender blindness has adversely affected women’s income (Jämställdhetsmyndigheten 2023). The report revisits the long-standing debate on the need for tax reform, which was considered during the January Agreement – the compromise that allowed for the formation of the previous government in 2018 – but was never initiated.
Citations:
OECD. 2015. “Sweden Policy Brief.” https://www.oecd.org/sweden/sweden-achieving-greater-equality-of-opportunities-and-outcomes.pdf
OECD. 2022. “Country profiles: Sweden.” https://www.oecd.org/regional/oecd-regional-outlook-2023-country-profiles-sweden.pdf
Jämställdhetsmyndigheten. 2022. “Kunskapsunderlag om frågor som rör skatter och jämställdhet.” https://jamstalldhetsmyndigheten.se/media/xr5fihnu/underlagsrapport-2023-2-skatter-och-jämställdhet.pdf
Vertical inequity has increased significantly over the past decade (OECD 2015; 2022). While the country remains one of the more egalitarian in the OECD, the trend of rising inequality persists. One way to counteract this trend is to improve the redistribution effectiveness of the tax and benefit system.
A recent report suggests that the tax system would also benefit from incorporating a gender perspective, arguing that gender blindness has adversely affected women’s income (Jämställdhetsmyndigheten 2023). The report revisits the long-standing debate on the need for tax reform, which was considered during the January Agreement – the compromise that allowed for the formation of the previous government in 2018 – but was never initiated.
Citations:
OECD. 2015. “Sweden Policy Brief.” https://www.oecd.org/sweden/sweden-achieving-greater-equality-of-opportunities-and-outcomes.pdf
OECD. 2022. “Country profiles: Sweden.” https://www.oecd.org/regional/oecd-regional-outlook-2023-country-profiles-sweden.pdf
Jämställdhetsmyndigheten. 2022. “Kunskapsunderlag om frågor som rör skatter och jämställdhet.” https://jamstalldhetsmyndigheten.se/media/xr5fihnu/underlagsrapport-2023-2-skatter-och-jämställdhet.pdf
To what extent do existing tax institutions and procedures minimize compliance and collection costs?
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9
9
The tax system is fully aligned with the goal of minimizing compliance and collection costs.
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7
6
7
6
The tax system is largely aligned with the goal of minimizing compliance and collection costs.
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3
4
3
The tax system is only somewhat aligned with the goal of minimizing compliance and collection costs.
2
1
1
The tax system is not at all aligned with the goal of minimizing compliance and collection costs.
A significant tax reform in Sweden in the early 1990s simplified taxes and reduced both deductible items and tax rates. Since then, two commissions of inquiry and a recent report have advocated for another large-scale tax reform, although none has been implemented so far. The report argues that the current system is overly complex, contains too many exceptions, and imposes high marginal taxes (Eklund, 2021; see also Jämställdhetsmyndigheten, 2022). Generally, taxpayers can easily file returns electronically through the Swedish Tax Agency’s digital services.
Citations:
Eklund, Klas. 2021. Vårt framtida skattesystem – en ESO rapport med försläg på en genomgripande skattereform. https://eso.expertgrupp.se/wp-content/uploads/2020/11/2020_7-vårt-framtida-skattesystem-webb.pdf
Jämställdhetsmyndigheten. 2022. “Kunskapsunderlag om frågor som rör skatter och jämställdhet.” https://jamstalldhetsmyndigheten.se/media/xr5fihnu/underlagsrapport-2023-2-skatter-och-jämställdhet.pdf
Citations:
Eklund, Klas. 2021. Vårt framtida skattesystem – en ESO rapport med försläg på en genomgripande skattereform. https://eso.expertgrupp.se/wp-content/uploads/2020/11/2020_7-vårt-framtida-skattesystem-webb.pdf
Jämställdhetsmyndigheten. 2022. “Kunskapsunderlag om frågor som rör skatter och jämställdhet.” https://jamstalldhetsmyndigheten.se/media/xr5fihnu/underlagsrapport-2023-2-skatter-och-jämställdhet.pdf
To what extent do existing tax institutions and procedures internalize negative and positive externalities?
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9
The tax system is fully aligned with the goal of internalizing externalities.
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7
6
The tax system is largely aligned with the goal of internalizing externalities.
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3
4
3
The tax system is only somewhat aligned with the goal of internalizing externalities.
2
1
1
The tax system is not at all aligned with the goal of internalizing externalities.
Tax policy has been used to absorb negative externalities and promote positive ones. In 2022, environmental tax revenue amounted to SEK 97 billion, a decrease of SEK 6.5 billion from 2021. The new government reduced the tax on fuel, while the center-right government decreased revenue from electricity.
Having said that, tax revenue from emissions rights has increased threefold from 2021 to 2022. Energy taxes contribute the most to environmental tax revenue and include energy tax on fuels, carbon dioxide tax, and energy tax on electricity (SCB, 2023).
Citations:
SCB (Statistikmyndigheten). 2023. “Environmental tax revenue decreases in 2022.” https://www.scb.se/en/finding-statistics/statistics-by-subject-area/environment/environmental-accounts-and-sustainable-development/system-of-environmental-and-economic-accounts/pong/statistical-news/environmental-accounts – environmental-taxes-2022-and-industry-allocated-environmental-taxes-2021
Having said that, tax revenue from emissions rights has increased threefold from 2021 to 2022. Energy taxes contribute the most to environmental tax revenue and include energy tax on fuels, carbon dioxide tax, and energy tax on electricity (SCB, 2023).
Citations:
SCB (Statistikmyndigheten). 2023. “Environmental tax revenue decreases in 2022.” https://www.scb.se/en/finding-statistics/statistics-by-subject-area/environment/environmental-accounts-and-sustainable-development/system-of-environmental-and-economic-accounts/pong/statistical-news/environmental-accounts – environmental-taxes-2022-and-industry-allocated-environmental-taxes-2021
Graph View
To what extent do existing budgetary institutions and procedures support or hinder sustainable budgeting?
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9
Budgetary institutions and policies are fully aligned with the goals of sustainable budgeting.
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7
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Budgetary institutions and policies are largely aligned with the goals of sustainable budgeting.
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3
Budgetary institutions and policies are only somewhat aligned with the goals of sustainable budgeting.
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1
1
Budgetary institutions and policies are not at all aligned with the goals of sustainable budgeting.
Since the mid-1990s and after the financial crisis of the early 1990s, fiscal and budgetary discipline in Sweden has been extraordinarily strong, and its tight budgetary regime has begun to yield benefits. Maintaining sound fiscal policy has been an overarching goal for both center-right and center-left governments. Sweden is one of the few countries that targets a budget surplus, and neither the government nor the opposition plans to diverge (Brenton and Pierre, 2017).
The budget surplus goal issue ultimately relates to the Keynesianism–monetarism controversy. Right-wing parties, currently in government, take a more monetarist approach, while the social democratic opposition has a more Keynesian perspective. This continuum aside, the fiscal and budgetary regulatory framework helps sustain a course of strong and sustained economic development. However, during the recent past, center-right parties and trade unions and employers’ organizations have argued for changing the strict rules to invest more money into climate protection measures (von Seth 2023). Indeed, public debt decreased during 2021 and 2022 and is expected to decrease further in 2023 (Government Offices of Sweden, 2022).
Sweden is a country with very low public debt compared to other OECD countries. On the other hand, Sweden has very high private household debt (OECD n.d.), which may cause problems if property prices fall in the near future.
The Swedish Fiscal Policy Council (2022) raises concerns about the volatile geopolitical situation that could change very rapidly. The council does not believe the current fiscal framework can accommodate spending 2% of GDP on defense by 2028, necessitated by Sweden’s NATO membership (Finanspolitiska rådet, 2022).
Citations:
Brenton, Scott and Jon Pierre. 2017. “Budget Surplus Goal Experiments in Australia and Sweden.” New Political Economy 22 (3): 557-72.
Finanspolitiska rådet. 2021. “Svensk Finanspolitik: Finanspolitiska Rådets Rapport 2022.” https://www.fpr.se/download/18.7a353d28187eafb12f910f70/1684825112707/Svensk%20finanspolitik%202023.pdf
Government Offices of Sweden. 2023. “Riktlinjer för statsskuldens förvaltning 2023.” https://www.regeringen.se/rapporter/2022/11/riktlinjer-for-statsskuldens-forvaltning-2023/
OECD. n.d. “Household Debt.” https://data.oecd.org/hha/household-debt.htm
von Seth. 2023. “Nu är det tack och hej till överskottsmålet.” Dagens Nyheter November 28.
The budget surplus goal issue ultimately relates to the Keynesianism–monetarism controversy. Right-wing parties, currently in government, take a more monetarist approach, while the social democratic opposition has a more Keynesian perspective. This continuum aside, the fiscal and budgetary regulatory framework helps sustain a course of strong and sustained economic development. However, during the recent past, center-right parties and trade unions and employers’ organizations have argued for changing the strict rules to invest more money into climate protection measures (von Seth 2023). Indeed, public debt decreased during 2021 and 2022 and is expected to decrease further in 2023 (Government Offices of Sweden, 2022).
Sweden is a country with very low public debt compared to other OECD countries. On the other hand, Sweden has very high private household debt (OECD n.d.), which may cause problems if property prices fall in the near future.
The Swedish Fiscal Policy Council (2022) raises concerns about the volatile geopolitical situation that could change very rapidly. The council does not believe the current fiscal framework can accommodate spending 2% of GDP on defense by 2028, necessitated by Sweden’s NATO membership (Finanspolitiska rådet, 2022).
Citations:
Brenton, Scott and Jon Pierre. 2017. “Budget Surplus Goal Experiments in Australia and Sweden.” New Political Economy 22 (3): 557-72.
Finanspolitiska rådet. 2021. “Svensk Finanspolitik: Finanspolitiska Rådets Rapport 2022.” https://www.fpr.se/download/18.7a353d28187eafb12f910f70/1684825112707/Svensk%20finanspolitik%202023.pdf
Government Offices of Sweden. 2023. “Riktlinjer för statsskuldens förvaltning 2023.” https://www.regeringen.se/rapporter/2022/11/riktlinjer-for-statsskuldens-forvaltning-2023/
OECD. n.d. “Household Debt.” https://data.oecd.org/hha/household-debt.htm
von Seth. 2023. “Nu är det tack och hej till överskottsmålet.” Dagens Nyheter November 28.
Graph View
How committed is the government to utilizing research and innovation as drivers for the transition to a sustainable economy and society?
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The government is clearly committed to utilizing research and innovation as drivers for the transition to a sustainable economy and society.
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The government is largely committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
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3
The government is somewhat committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
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1
The government is not at all committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
Research and innovation policies have traditionally been a priority for a country whose competitive advantage lies in the knowledge sector. Sweden is one of the eco-innovation forerunners (Rosenberg Johansen, 2022) and, through its commitment to the circular economy, has a distinct focus on sustainable development, economy, and society. Innovation is driven by Vinnova, which has a series of publications for different sectors. However, there is no single national strategy that can be characterized as a roadmap for innovation.
One of Sweden’s research councils, FORMAS, is the Swedish Research Council for Sustainable Development. It funds basic and needs-based research in the fields of the environment, agriculture, and spatial planning. The council’s budget was SEK 1.87 billion in 2023. The 2021 budget increased under the previous government’s higher education and research policy titled “Research, Freedom, Future – Knowledge and Innovation for Sweden.”
However, this is about to change. A recent commission of inquiry proposes that FORMAS – as well as other research councils – be phased out as they restructure into three (or alternatively, two) funding agencies. It is unclear how sustainability will be addressed in this structure; the word appears twice in the English summary (once in a footnote) and once in Swedish (SOU, 2023).
Citations:
Rosenberg Johansen, M. 2022. “Eco-Innovation Country Profile: Sweden.” https://circabc.europa.eu/ui/group/96ccdecd-11b4-4a35-a046-30e01459ea9e/library/a28d6b32-bc8e-4dc9-9280-d26b368ad824/details
SOU. 2023. Ny myndighetsstruktur för finansiering av forskning och innovation. SOU 2023:59. https://www.regeringen.se/rattsliga-dokument/statens-offentliga-utredningar/2023/10/sou-202359/
Sveriges Riksdag. 2020. “Forskning, frihet, framtid – kunskap och innovation for Sverige.” Utbildningsutskottets betänkande 2020/21: UbU16. https://data.riksdagen.se/fil/D71AB561-F45A-4EBB-93AD-8FAA9A7FD49C
One of Sweden’s research councils, FORMAS, is the Swedish Research Council for Sustainable Development. It funds basic and needs-based research in the fields of the environment, agriculture, and spatial planning. The council’s budget was SEK 1.87 billion in 2023. The 2021 budget increased under the previous government’s higher education and research policy titled “Research, Freedom, Future – Knowledge and Innovation for Sweden.”
However, this is about to change. A recent commission of inquiry proposes that FORMAS – as well as other research councils – be phased out as they restructure into three (or alternatively, two) funding agencies. It is unclear how sustainability will be addressed in this structure; the word appears twice in the English summary (once in a footnote) and once in Swedish (SOU, 2023).
Citations:
Rosenberg Johansen, M. 2022. “Eco-Innovation Country Profile: Sweden.” https://circabc.europa.eu/ui/group/96ccdecd-11b4-4a35-a046-30e01459ea9e/library/a28d6b32-bc8e-4dc9-9280-d26b368ad824/details
SOU. 2023. Ny myndighetsstruktur för finansiering av forskning och innovation. SOU 2023:59. https://www.regeringen.se/rattsliga-dokument/statens-offentliga-utredningar/2023/10/sou-202359/
Sveriges Riksdag. 2020. “Forskning, frihet, framtid – kunskap och innovation for Sverige.” Utbildningsutskottets betänkande 2020/21: UbU16. https://data.riksdagen.se/fil/D71AB561-F45A-4EBB-93AD-8FAA9A7FD49C
Graph View
How committed and credible is the government in its activities to guide the effective regulation and supervision of the international financial architecture?
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The government is clearly committed to ensuring the stability of the global financial system.
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7
6
The government is largely committed to ensuring the stability of the global financial system.
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3
The government is somewhat committed to ensuring the stability of the global financial system.
2
1
1
The government is not at all committed to ensuring the stability of the global financial system.
The Swedish government has been a forerunner in enforcing regulations aimed at preventing criminal financial behavior in international financial management. Sweden also supports and implements rules laid out by the European Union as well as other international bodies in the field of international finance.
The appetite for a Tobin tax is nonexistent following the failure of its enforcement in the late 1980s. Domestically, there has been some friction between the Ministry of Finance and large commercial banks over the past few years. A new “risk tax” came into effect in 2022, requiring banks to pay a tax if their debts associated with Swedish operations exceeded SEK 150 billion in the previous year. In 2022, the tax rate was 0.05% and is set to increase to 0.06% in 2023 (Sveriges Riksdag, 2021).
Citations:
Sveriges Riksdag. 2021. Riskskatt för kreditinstitut. Betänkande 2021/22:skU11 https://www.riksdagen.se/sv/dokument-och-lagar/dokument/betankande/riskskatt-for-kreditinstitut_H901SkU11/html
The appetite for a Tobin tax is nonexistent following the failure of its enforcement in the late 1980s. Domestically, there has been some friction between the Ministry of Finance and large commercial banks over the past few years. A new “risk tax” came into effect in 2022, requiring banks to pay a tax if their debts associated with Swedish operations exceeded SEK 150 billion in the previous year. In 2022, the tax rate was 0.05% and is set to increase to 0.06% in 2023 (Sveriges Riksdag, 2021).
Citations:
Sveriges Riksdag. 2021. Riskskatt för kreditinstitut. Betänkande 2021/22:skU11 https://www.riksdagen.se/sv/dokument-och-lagar/dokument/betankande/riskskatt-for-kreditinstitut_H901SkU11/html