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Back to Work: Sweden

Improving the Re-employment Prospects of Displaced Workers

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Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is the fourth in a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that Sweden has been relatively successful in minimising the adverse effects of displaced workers, manily due to the longstanding tradition of collaboration between the social partners to share responsibility for restructuring by creating special arrangements and practices that provide help to workers much faster that in other OECD countries. Despite this positive institutional framework, there is room to improve policies targeted to displaced workers as remarkable inequalities still exist in both the Swedish labour market and in the way workers are treated.

 

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Assessment and recommendations

As in other OECD countries, job displacement as a consequence of economic restructuring is a prominent feature of the Swedish labour market. On average during 2002-12, 2.1% of employees lost their job each year due to economic reasons such as firm downsizing and establishment closures. There is no indication that displacement rates in Sweden have risen permanently since 2000, but they increased during both the severe economic crisis of the 1990s and in the recent global financial crisis (GFC). Like in some other OECD countries, displacement rates in Sweden are higher for men, young and low-skilled workers than they are for, respectively, women older and better-skilled workers.

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