Sweden’s economy has fared well in recent years thanks to strong macroeconomic, fiscal and financial fundamentals, as well as a competitive and diversified business sector. Output has been lifted by an expanding labour force, investment and lately a pick-up in productivity. Unemployment is receding, although it remains high for vulnerable groups, notably the foreign-born. While income inequality is relatively low, it has risen more rapidly than in any other OECD country since the 1990s. Capital gains boosted top incomes, while benefits increased more slowly than wages. High labour market entry thresholds, spatial segregation, and bottlenecks in migrant settlement reduce opportunities and social mobility. Sweden is one of the world’s most gender-equal countries, even though foreign-born women are lagging behind. Women have a high employment rate, outperform men in education and are well represented in government and parliament. However, gender wage differences persist: women are under-represented on private company boards, in senior management positions, in many well-paid and influential professions and among entrepreneurs. This Economic Survey of Sweden assesses the country’s recent macroeconomic performance and prospects, and offers recommendations to foster more inclusive growth. In particular, reforms to housing, wage subsidies and migrant settlement and integration would raise the incomes and opportunities of the disadvantaged. So would a more systematic approach to benefits uprating. Better shared parental leaves would raise gender equality further. Fostering women entrepreneurship and promoting entry of women in senior management is also crucial.

Special Features: Income inequality; Gender inequality