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.




Income support for displaced workers in Sweden

Although most displaced workers in Sweden find a new job quickly, providing adequate income support to workers following displacement is crucial, especially when the economy is weak and job growth limited. A good income support system should help to compensate the major costs borne by workers following job displacement without reducing their incentives to move quickly into new jobs. This chapter examines the different sources of income support available to displaced workers in Sweden and to unemployed people in general, with particular attention to the coverage and generosity of the support for displaced workers. Overall, displaced workers with stable work histories have relatively good access to income support through both unemployment insurance and supplementary top-up schemes. The main challenge is to strengthen financial provision for more vulnerable groups of displaced workers such as younger workers with short tenure and blue-collar workers.




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