Ageing and Work in Sweden : Background Paper on Sweden, presented for the ‘Millennium Project’ conference in Tokyo, December 4th -6th, 2000, organized by the Japanese Ministry of Labour

Sweden experienced a dramatic shakeout of the older workforce in the first half of the 1990s as part of the economic crisis 1991-94. The labour force participation rates and, even more pronounced the employment rates for the older workforce sank dramatically. However, when the Swedish economy recovered in the latter half of the 1990s the employment rates for the older workers, both for men and women, did not return to the former rather high levels. Today the relatively low employment rates of the older workers are regarded as a major social and economic problem in Swedish society in three ways. First, it is seen a cost problem. Unemployment insurance and other kinds of social insurance schemes for those that retired “too early” are expensive and regarded as a heavy burden (i.e. cost) on society. Secondly it is seen as a problem of changing norms. The Swedish labour market and social policy regime is built around the “work line”, the axis around which economic growth as well as the character of welfare provision is constructed. A long period of falling employment rates in the older workforce can lead - and is already being seen as having led to - a change in the perception of the normal retirement age, that is the expected effective retirement age. The average effective retirement age in Sweden is judged to be around 61 years (although many experts argue for a figure of 59 years). A recent poll among the 45-60 age group showed that a clear majority in this group wanted to retire at 60-61 years (SIFO 2000). This normative change is regarded as problematic and potentially dangerous since it will influence the behaviour of the older workforce as well as the attitudes of the employers towards ageing workers. Thirdly, it is increasingly seen as a problem for the economic growth in Sweden. Long-term economic forecasts envisage a growth in the labour force in Sweden, which for demographic reasons have to take the form of increasing employment rates among the older workforce. This long-term bottleneck problem in the Swedish economy gives rise to proposals to change the pension systems (the public as well as occupational systems) and to make entry into the disability pension schemes more difficult. A series of measures is proposed to make it more difficult for older workers to enter the different social insurance schemes, i.e. those schemes that make early exit possible. The Millennium Project Japan Institute of Labour, Toky