2005 OECD Economic Surveys: Sweden 2005

image of OECD Economic Surveys: Sweden 2005

OECD's 2005 survey of the Swedish economy examines its key economic challenges including population ageing, maintaining the welfare system, increasing the labour supply, and achieving environmental objectives.  Individual chapters examine strengthening public finances, reducing sickness and disability absences, and raising hours worked. This issue's special chapter discusses improving quality and value in healthcare.

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Raising Hours Worked

This chapter discusses other ways to increase labour supply, aside from reducing sickness absences (which is discussed in Chapter 3). High labour taxes and the benefit system are contributing to reduce hours worked, and it is recommended that marginal tax rates be lowered by moving to other tax bases. Generous leave schemes also reduce working hours. Although labour force participation is high in general, there are still pockets where it can be raised, notably by getting young people through the educational system faster, improving the integration of immigrants and reducing incentives to early retirement. Labour supply would also benefit from stricter application of unemployment rules and from the elimination of ineffective active labour market programmes.

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