OECD Economic Surveys: Sweden 2019

Annex. Progress in structural reforms

Abstract

This annex summarises recommendations made in previous Surveys and main actions taken since the OECD Economic Survey on Sweden was published in February 2017.

 

Recommendations in previous Surveys	Actions taken
Business regulations, infrastructure and innovation
Simplify regulatory procedures, in particular regarding licences and permits.	Some promising initiatives to digitalise and simplify procedures have been taken, notably in restaurants and tourism. Some administrations are using digital tools to improve services, simplify procedures and shorten processing times.
Streamline building requirements across municipalities. Enhance the access of small and foreign firms to the public procurement process by improving its timeliness, predictability and clarity.	The implementation of the 2015 22-point housing plan, which includes measures to release land for development and speed up planning processes, continues. An investigation into simplifying and increasing flexibility in procurement regulations, including measures to reduce appeals, has been started. Building and planning regulations have been made available online in foreign languages.
Invest to improve the quality of roads and rail, with careful consideration of social returns.	The Government has made major investments in railway maintenance and investments in public transport in rural areas.
Continue to broaden support for innovation and enhance co-ordination of innovation and research policies. Lower financing constraints by fostering the development of debt and equity instruments and platforms for corporate finance.	Innovation and research policy is being gradually strengthened, but governance, leadership and strategic vision need further improvement.
Skills and education
Raise the attractiveness of teaching by increasing monetary incentives, offer clearer career paths, and improve teacher education.	The “Teacher salary boost” offers enhanced career pathways and pay, financed by grants from the central government.
Increase support for struggling pupils, including immigrants, through early intervention and targeting resources based on socio-economic background.	The 2018 reading-writing-mathematics guarantee introduced mandatory evaluations of pupils’ reading, writing and mathematics skills from an early age, followed by extra support for those who need it.
Enhance support and incentives for immigrants to learn Swedish.	New regulations, better coordination between agencies and strengthened funding contribute to shorter processing times for new immigrants, more flexible integration activities and clearer expectations to migrants’ own efforts.
Labour market and social policy
Reduce the gap in employment protection between permanent and temporary contracts and increase flexibility in entry level wages.	No action taken. The new government is set to appoint a committee that will investigate how a better balance can be created in employment protection for staff with different terms of employment.
Consider extending the coverage of unemployment insurance by easing the entitlement conditions in terms of duration of past work, and moving to a system with mandatory contributions to unemployment insurance.	No action taken. An inquiry on the design of income-based unemployment insurance and ways to increase coverage has been opened in 2018, including an analysis of the opportunity to modify the length and level of unemployment benefit compensation.
Continue to simplify the procedures to help migrants get residence and work permits.	Policies to speed up the integration of migrants have been stepped up, including education programmes, recognition of qualifications and compensation to municipalities for refugee reception.
Rationalise by merging and harmonising various wage subsidy schemes to better target the most vulnerable workers, ease the related administrative burden and increase take-up.	Five employment subsidy programmes were merged into a new scheme (Introduction jobs) in 2018, with a subsidy of 80% up to a gross wage ceiling of SEK 20 000 per month.
Review annually the distributional consequences of uprating social benefits, taking equity, fiscal costs and work incentives into consideration.	No systematic review has been introduced. However, child and housing allowances increased and taxes on pensions were reduced in 2018.
Gender equality
Encourage parents to split parental leave more equally by continuing to increase the share reserved for each parent.		No action taken.
Enhance active labour market policy for foreign-born women when the Introduction programme ends, to prevent them from drifting away from the labour market.		The government has, in addition to general measures to speed up the integration of newly arrived immigrants, taken initiatives focusing on foreign-born women, e.g. funding to increase the possibilities for persons on parental leave to take part in Swedish language courses and training, improving the quality of education in Swedish for immigrants and outreach and study motivation actions for foreign-born women..
Housing policy
Introduce a cap on household debt-to-income ratios.	No cap has been introduced. However, amortisation requirements have been tightened for borrowers with new mortgages exceeding 450% of gross income.
Reform the recurrent property tax to better align tax charges with property values. Phase out the deductibility of mortgage interest rate payments.	No action taken. A broad tax reform will be initiated which, among other goals, aims to reduce household indebtedness and improve the functioning of the housing market.
Enhance co-operation between central and local government in land-use planning and increase incentives for municipalities to facilitate the timely release of development land. Simplify land-use planning procedures, balancing economic, environmental and social considerations.	The implementation of the 2015 22-point housing plan, which includes measures to release land for development and speed up planning processes, is going on.
Ease rental regulations to incentivise rental housing supply, mobility and better utilisation of the housing stock, while maintaining tenant protection against abuse.	No action taken. Rent setting for new dwellings will be liberalised.
Climate change mitigation policies
Continue to gradually phase out exemptions to the carbon tax.	Fuel and vehicle taxation has been overhauled in 2018 to incentivise further reductions in carbon emissions. But implicit carbon taxes on fossil fuels remain substantially higher in household than in industrial use.