Contribution to EIRO thematic feature on Youth and work - case of Sweden

Since the beginning of the 1990s new labour market policy measures have been created in order to make it easier for young workers to enter into the labour market. Above all the municipalities have taken measures in the unemployment area which traditionally was governmental domains. The municipality youth unemployed system started in 1995 and is still working. One condition is that the state local job office and the concerned municipality conclude an agreement. The municipalities - there are 290 in Sweden - may arrange for employment mainly in two programmes, the Municipalities’ Youth Programme (KUP) and the Youth Guarantee (UNG). KUP is for young people 18-20 years old, and UNG is for youth 20 - 24 years old. For the municipalities the possibility to take measures for young workers is voluntary. The Government pays for the activities.

The aim of KUP is to give some education and professional experience that may lead to work or studies at a higher level. In 2004 about 260 municipalities had agreements with the state. The Youth Guarantee agreement (UNG), established in 1998, means that the municipality is obliged to offer unemployed youth a full time employment that is activating and developing. The most common measure is practise at local companies and in local services (hospitals, schools etc.). The aim of the programme is to give the young unemployed better chances to receive a job, but also open up for a more qualifying education.

The young workers with a university degree also have problems to enter the labour market. The Government has charged The Labour Market Board (Arbetsmarknadstyrelsen, AMS) with the task to start experimental activities for this group in cooperation with temporary work agencies and other companies. The activities will encompass unemployed university graduates and be directed at small and medium sized companies and last for two years, 2006 and 2007. The young workers should have been registered at the job office for more than 6 months and without jobs for more than three months after the examination. The activities will encompass 4,000 young graduates per year in 2006 and 2007. The costs are accounted to about SEK 500 million each year.

In May 2005 the Government commissioned a National Coordinator with the task to examine the conditions for a faster establishing of young workers in the labour market. The coordinator shall, in consulting the social partners, especially look into possibilities to and work out methods for the social partners to conclude collective agreements for a faster establishing of young workers. The coordinator will also survey the existing youth programmes and analyse the results of different measures. Young people shall be invited to take part in the survey. The work of the coordinator will be accounted for, at the latest in November 2006.

In case of lack of labour power in some sector it is the task of the local state job offices to find workers in contact with unemployed and other job seekers all over the country. Also the private temporary work agencies may play a role in this. The trade unions do not deal with recruiting of workers. In Sweden currently the building sector is starting to see a possible lack of labour power with the beginning in 2005.

Sweden has also started to see an increased amount of Baltic and Polish workers coming over the Baltic Sea looking for jobs. The Swedish collective agreements apply to the foreign workers being employed in Swedish companies, as a general rule. The foreign workers do not have to become members of a trade union. Often they are just in Sweden on a temporary basis, but if they do join a union they are guaranteed to receive the same conditions as Swedish workers. If the Polish or Baltic employer (or someone else from a foreign country) becomes a temporary member of a Swedish employers’ association concluding collective agreements these will also apply to the foreign employer and his employees. (SE0509102F)

Sweden supports the network against youth unemployment that the United Nations, the World Bank and International Labor Organization started - the Youth Employment Network.

Role and views of the social partners

Sweden follows the traditional line of collective bargaining by the social partners for mainly the pay issues and other working conditions. The Government and the state authorities, as well as regional/local authorities are responsible for the social welfare issues including the labour market policy measures. The Government and the local authorities are also responsible for education in the ordinary school system and universities. The employers provide different sorts of education and training for their employees, sometimes based on collective agreements and sometimes not. The trade unions as well as the employers’ associations take part in the open discussion, in lobbying, opinion-making, education, seminars, answering to different proposals being sent about by the Government for consideration as well as arranging their own opinion-making programmes and meetings.

Discussions and research

One example of recent research in the field of unemployed youth is a study called Scarring effects of the first labour market experience from the Institute for Labour Market Policy Evaluation (Institutet för arbetsmarknadspolitisk utvärdering, IFAU, 2004). The authors’ name is Oskar Nordström Skans and he surveys the labour market situation for unemployed youth. Among other things, he discusses if measures arranged by the state and other actors are meaningful and lead to any results for the young unemployed. The author also examines what a period of unemployment may mean for a young unemployed. The study points to several reasons why unemployment may be detrimental to later labour market performance. One reason may be that the market value of the skills acquired in high school depreciates quite fast if the skills are not put to use, the author states. Another reason may be that employers, being uncertain as to the productivity of a potential worker, may use earlier unemployment spells as a screening device when looking for people to recruit. Also, experiences of being unemployed may especially diminish young people’s feelings of attachment to the labour market. If they spend their time primarily with other young, unemployed people they may eventually reduce the stigma of unemployment and thus also the incentive to work. (SE0412102F)

Research in the field especially regarding the young labour force is various and many studies have resulted in reports and books. (There are about 110 different titles since 1968 concerning young unemployment in the library of Arbetslivsinstitutet, (http://www-inter.niwl.se/bibl/).

Commentary

The years 2005, and 2004, were very active years in discussing the youth unemployment. For example, the Minister of Youth Affairs (and other areas) Ms Lena Hallengren, stated in a debate article (Göteborgs-Posten, 13 May 2005) that the Government was very worried as currently more than 60,000 Swedish young workers were unemployed or in labour market policy programmers. Further measures had to be taken, and the Government had worked out a ten point programme in order to fight the youth unemployment (partly to be seen in the National Budget 2006, described above):

• A National Coordinator will be appointed in order to find methods to give the young workers a quicker establishment in the labour market (see above)

• An employment support will be given to employers for hiring long-term unemployed 20 -25 years old

• A larger information responsibility for the municipalities is of need. The municipality should know what the inhabitants up to 20 years are doing, that is the young people that have not finished their upper secondary school studies. This knowledge should be used in offering individual measures.

• 500 new posts at the Swedish folk high-schools will be reserved for long-term unemployed youth

• All unemployed youth will receive an individual action plan much faster than often is the case currently. The plan should be followed up regularly and be aimed at active job seeking

• More so-called navigator centers will be established. A navigator center offers for example the young unemployed voluntary mentors from local business.

• The municipal youth programmes (UNG, KUP, see above) shall be valuated

• More apprentice-directed education will be established in the secondary school system. This education might also lead to possible acceptance for studies at the universities

• The so-called individual programmes in secondary schools should be improved and worked out to be alike all over Sweden

• More young people shall be made interested to start their own companies. NUTEK, the Swedish Agency for Economic and Regional Growth, will carry out a 3-year national programme in order to promote young entrepreneurship

The tree main trade union organizations The Swedish Confederation of Trade Unions (Landsorganisationen, LO), the Swedish Confederation of Professional Employees (Tjänstemannaorganisationen, TCO) and the Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO) have all during 2005 published reports on the issue of the increasing youth unemployment and the very importance of new measures. LO has been rather critical towards the Government at times and accused it of doing too little for the young unemployed. However, the Government’s Budget Proposal for 2006 and further discussion has been received positively.

The IFAU report referred above about Scarring effects of the first labour market experience (Se0412102F) as well as research from other countries are beginning to show that early experience of unemployment may be detrimental and make many young people stay too long in unemployment as they have more difficulties than necessary to finally receive a job. It seems as if the Swedish Government and its labour market instances, sometimes being accused of being rather ineffective, are willing to make efforts on a broader basis to improve the situation for the young unemployed workers. (Annika Berg, Arbetslivsinstitutet)