Please come – but then what?  Sweden and the dilemma of integration Part 2: “A labour market for insiders?”

This article forms part of a 2013 series on integration in Sweden

“What we tend to forget is that Sweden is neither politically, economically or culturally an optimal immigrant country. We have labour and housing markets for insiders, we are a nation united by a thick layer of identity-bearing markers and we’ve historically had limited experience with multiculturalism.”

Professor Andreas Johansson Heinö

Immigrants, especially non-European immigrants, represent a disadvantaged group on the Swedish labour market. In spite of a comprehensive set of labour-market related integration measures, labour market participation rates of the foreign born in Sweden are still rather low: compared to the native population, refugees in Sweden are more likely to be unemployed, have temporary jobs, have lower income and be overqualified for their jobs. However, the issue of labour market integration is not swept under the rug by this government. On the contrary, during Sweden’s current Presidency of the Nordic Council of Ministers, Sweden is according integration into the labour market for those born abroad a particular focus, while introducing new policies such as making Swedish language lessons more diverse (so an engineer is no longer taught at the same level as someone who is barely literate). Sweden is currently president of the Global Forum on Migration and Development and has set as one o fits priorities to strengthen the development effects of migration. The Minister for Integration, Erik Ullenhag, has repeatedly stated that Sweden will not introduce a stricter refugee policy, as the Sweden Democrats demand: “We see this as an economic problem and a youth problem, not as a migration problem. If you have a harsh attitude in regard to migrants you harm your self-esteem as a country. Moreover, you undermine the position of those who are already here. Besides, Sweden needs migrants.” In this second article on integration, Mundus International takes a closer look at integration into the labour market for those born abroad.

Monthly Policy Review

Assessing labour integration

Over time, immigration to Sweden has shifted from mainly labour migration from European countries to mainly refugee andfamily migration from non-OECD countries. The 1950 saw workers coming to Sweden from the Nordic countries (especially from Finland), Germany, Austria and Italy. During the 1960s, labour immigration was mainly from Yugoslavia, Greece and Turkey. Since the 1980s, however, labour force immigration has been insignificant and immigration has shifted to primarily refugee and family migration from non-OECD countries with significant immigration from Iran, Chile, Lebanon, Poland and Turkey, during the 1990s from the former Yugoslavia and the 2000s from Iraq, Somalia, Afghanistan and Ethiopia. Many of the refugees from nations such as Chile, Iran, and Iraq are from the educated elite and middle class, seeking a better life abroad. In 1950, the rate of employment for the foreign-born was 20 per cent higher than that for the average citizen. This figure dropped by 50 percentage points in as many years: in 2000, the rate of employment was 30 per cent lower for the foreign-born. One reason for this dramatic shift is that Sweden shifted from labour immigration to refugee immigration.

The changing character of immigration to Sweden has led to the labour market integration of foreign-born individuals becoming an increasingly serious challenge. The 2013 report by the Commission on the Future of Sweden concludes that integration works least well for women and poorly-educated immigrants, who come to Sweden as refugees, or as family members of refugees. Integration is also working poorly for the children of parents who came to Sweden as refugees.

The employment rate is especially low for refugees from non-OECD countries. Even ten years after the time of migration, the employment rate is less than 50 per cent in some immigrant groups. Compared with other countries, the difference in employment between natives and immigrants in Sweden is big. Unemployment among foreign-born, is as high as 15.9 per cent, compared to only 6.4 per cent among native-born. The employment rate for native-born is 67.2 per cent, compared to only 57.3 per cent among those foreign-born. For those who arrive as refugees, it takes 6–7 years before half the members of this group find employment. After 10 years in the country only 60 per cent of those with refugee status and 65 per cent of family members are gainfully employed. The corresponding figure among labour immigrants is 77 per cent. While it is clear from the discussion that integration has its failings, it is worth pointing out that almost all foreign-born persons find employment sooner or later. Of all those who came to Sweden as immigrants to work or study, 98 per cent have held a job at some time or other, while the corresponding figure among those who came as refugees or as family members is 90 per cent. Both statistically and in the public debate, the ‘immigrants’ or ‘foreign-born’ are often treated as a homogeneous group, which creates a false picture. The group ‘foreign-born people’ consists of both highly educated people from rich, democratic countries and poorly educated people from poor, non-democratic countries. It is important to keep in mind therefore that the employment rate varies greatly depending on the region and the country immigrants were born in.

It is difficult to evaluate integration processes – when studying Sweden’s efforts on labour market integration different international comparisons show varying success of the Swedish policies. Even though Swedish integration policies have an exemplary reputation, the gap in unemployment between the native and foreign-born population in Sweden is still huge. The British Migration Policy Index (MIPEX) – a tool to compare and assess integration policy – ranks Sweden first among all 31 OECD countries. The MIPEX index measures the formal opportunities available to immigrants in the labour market on the basis of indicators such as equal employment opportunities, access to education, and protection against discrimination. However, it is important to highlight that the index does not measure how well integration is actually working in society.  The OECD on the other hand, assesses the difference in employment between native-born and foreign-born persons as a measure of integration. The OECD data shows that Sweden has the largest gap of all 31 countries; roughly 57 per cent of Swedes born outside Sweden between the ages of 15 and 74 have a job, whereas the same figure for native Swedes is 67 per cent. This is lower that the OECD average.  The foreign-born population is less likely to be employed than their native-born counterparts and according to OECD, the discrepancy is partly driven by differences in age and educational distributions.

A 2012 study from Stockholm University concluded that Sweden is the second worst country in Europe when it comes to labour market integration. In the study, Sweden’s unemployment statistics were compared to those of fifteen other European countries, including Britain, Germany, France, Italy, Norway and Denmark. According to the report there is a lower rate of employment and higher unemployment among immigrants who have been in Sweden for up to ten years compared to many other European countries. 27 per cent of immigrant women are unemployed during the first ten years in Sweden, and 23 per cent of immigrant men. Only Spain has a higher unemployment rate for immigrant men, and France for immigrant women. However, the study also indicated that something happens after ten years at which point Sweden fares better in comparison with the other countries. The unemployment rate then drops to 11 per cent for both women and men. The report cited Sweden’s rigid labour market, language, and a lack of involvement by community-based organizations in the integration process.  A reason for the long integration process could be that Sweden has received more refugees than the other countries in the study, who have had a higher rate of labour immigration. Mr Ullenhag belives the numbers indicate a failure: “We have problems in Sweden, as in other countries, with discrimination and prejudice. Many of the 15 per cent of Sweden’s foreign-born population still identify as immigrants and do not feel they are a part of society. That is a problem for much of Europe.”

The 2013 report by the Commission on the Future of Sweden points out that one important reason why the gap between native-born and foreign-born persons is wider in Sweden than in many other countries is that the activity rate among native-born women is one of the highest among the OECD countries:  “This particular difference between Sweden and other OECD countries…is thus attributable less to a low activity rate among foreign-born persons in general than to a high rate among native-born women. At the same time, employment in Sweden among foreign-born women is consistently 10 percentage points lower than among foreign-born men, which represents an important challenge from a gender equality viewpoint. Thus the gap between native-born and foreign-born women is particularly wide in Sweden.”

Wherein lies the problem?

Professor of International Migration and Ethnic Relations, Pieter Bevelander, has shown that the structural changes in the 1980 – and 1990’s made the Swedish economy less suitable for immigrants with lower human capital and less “cultural” competency: the economy and labour market have become very qualified, with the consequence that the market is struggling to absorb people with lower qualifications. The structural change is part of the process that raises productivity and the standard of living, but at the same time it has made Sweden a difficult country to work in for someone who does not have such high qualifications. Sweden is also a relatively small country and the Swedish language is not widely spoken outside the country, which means that immigrants must undergo a long training period before they can attempt to enter the job market. Factors such as direct or indirect discrimination is also relevant, and in Sweden social networking, often built up over generations, plays quite a crucial role in the recruitment process. In addition, the expansion of the Swedish welfare state since the mid-twentieth century has created a situation where the incentive to work has reduced, whilst the incentive to live off government hand-outs has increased, meaning that Sweden sees many immigrants trapped in long-term dependency on government benefits.

A 2013 report by ECFIN Country Focus states that while the performance of the Swedish labour market is generally very good, it does not function well for those with non-EU migrant background. Reports on Swedish labour integration have pointed out several factors – such as insufficient language skills, lack of contacts and networks, and relatively high thresholds for labour market entry and discrimination – to help explain why it takes time for foreign-born persons to become established in the labour market.

  • Lack of language skills Many studies show that a thorough knowledge of the language spoken in the country is crucial for success in the labour market. This is particularly true of Sweden – in contrast to English-speaking and French-speaking countries. In Sweden, like in other part of Europe, language introductory programs are the responsibility of municipalities, but many reports argue that language programmes are not successful with many immigrants failing to complete the programme.
  • Fewer contacts and networks Another obstacle to integration in the labour market is that many job openings are filled through informal contacts, and foreign-born persons have less access to informal employment networks than natives.
  • Labour market thresholds Wage costs and other costs of employing someone are high in Sweden, and globalization and technological advances have resulted in both the elimination of many low-skilled jobs.
  • High requirements to be considered as employable Accessing the Swedish labour market is very hard, especially if immigrants have language skills but are not well-educated. Immigrants from non-OECD countries typically have a low level of education when entering Sweden, and if they come from rural areas, many left school very early.
  • Ethnic discrimination Many studies show that ethnic discrimination occurs in the labour market, but, it is unclear how extensive it is, and what kind of discrimination is most common.

Government policies

Integration policies in Sweden are trans-sectoral, meaning that the objectives of integration policies are to be realised through measures within several policy areas, and by many different government ministries and agencies. Previously, the Ministry for Integration and Gender Equality coordinated integration policies, but the government wanted to give integration a stronger link to labour market policy and hence moved the integration portfolio to the Ministry of Employment in early 2011. The Ministry of Employment is also responsible for certain integration issues, such as the establishment of newly arrived immigrants in working life and society, and combating and preventing discrimination.

The integration of immigrants into the Swedish society and labour market is currently one of the most important issues facing policymakers, and it is also a major political issue. Some have suggested that if the Social Democrats’ come into power following the election, they should abolish the position of integration minister all together. The party’s governing board said that integration is “a problematic concept” that should preferably not be used.

Since taking office in 2006, the government has implemented several reforms aimed at increasing immigrant participation in the Swedish labour market. In September 2008, the Swedish Government presented a comprehensive strategy for integration entitled “Empowerment against exclusion – the Government’s strategy for integration”. The overall focus of the strategy is to increase the supply and demand of labour and to create quality and equality in schools. The strategy identifies the following seven areas of special importance:

  • Faster introduction for new arrivals
  • More in work, more entrepreneurs
  • Better results and greater equality in school
  • Better language skills and more adult education opportunities
  • Effective anti-discrimination measures
  • Redevelopment of urban districts with extensive social exclusion
  • Common basic values in a society characterised by increasing diversity

Participation in integration programmes in Sweden is generally voluntary. Neither language classes nor activities to facilitate entry in labour market are mandatory. In December 2010, the ‘Law on the establishment of certain newly incoming immigrants’ (Lag 2010:197I) entered into force. The law aimed at speeding up the introduction of newly arrived immigrants into working and social life by encouraging them to become actively employed, clarifying the division of responsibilities between governmental agencies and improving the use of skills of new arrivals. The reform also gave the Swedish Public Employment Service greater responsibilities for newly arrived immigrants, e.g. Swedish language education, civic orientation and labour market activities. The government intends for the general direction of the Swedish Public Employment Service’s assignment to continue, but believes it needs to be developed further; the focus on employment must continue to be strengthened, and activities need to be better adapted to target groups.

As part of the 2010 integration policy reform, two new employment-related measures – the so-called “step-in jobs” and “new start jobs” – were introduced. The “step-in-jobs” are subsidised employment aimed at faster entry into the labour market and better language learning. They can be offered to newly arrived immigrants in combination with Swedish language courses. The subsidy amounts to 80 per cent of employer wage costs. In addition, newly arrived immigrants receive information on where in Sweden their (potential) skills are in-demand, so as to reach a better matching between individual skills, labour market needs and training.

Several Swedish organisations, authorities and companies are supporting entrepreneurs with immigrant backgrounds who are investing in and trading with their home countries. According to IFS, an organisation that promotes migrant entrepreneurs, every fifth company that launches in Sweden is started by a person with foreign background. In an international comparison, Sweden stands out in having particularly high ‘over-qualification rates’ of foreign-born persons, in comparison with natives; three times as many foreign-born persons as Swedes are in employment that does not correspond to their qualifications.

The Swedish Agency for Public Management has published an evaluation of the reform on faster introduction of newly arrived migrants that entered into force in December 2010. The evaluation concludes that expectations on the reform have only been met in half and that involved authorities need to strengthen coordination of their activities. The report further stated that while the authorities work harder than before on integrating the newly arrived into the labour market, not enough is being done.  It also said that people who had received a residence permit had to wait over two months for a so-called establishment plan from the Swedish Public Employment Service’s (SPES) and that activities arranged by SPES were not suitable for the individuals’ needs. Similarly, a November 2013 report from the Swedish National Audit Office has examined the “step-in jobs” and the “new start jobs”, and concluded that, while they make it easier for new immigrants to enter the labour market, they could be more efficient.

The government believes that the general direction of the Swedish Public Employment Service’s assignment to provide introduction activities should continue, but considers that the assignment needs to be developed by strengthening the focus on employment and adapting activities to the relevant target group.

Suggestions for improving labour market integration: a stakeholder view

In a UNHCR report from September this year entitled A New Beginning – Refugee Integration in Sweden, immigrants were interviewed on five different policy areas. In terms of the labour market, the stakeholders stressed the importance that SPES recognize the refugees’ human capital from the beginning and inform them about possibilities to validate prior educational and work experiences. This includes examining if it is possible to achieve the qualifications needed to get the refugee’s dream job, and if so, to make an individual plan for how to get there. It also involves providing information about which professions have a labour shortage and which professions have high competition.

In the interviews, stakeholders stated that employers within the public- and private sectors need to be more open to diversity and use the opportunity to employ people with a different background. Since many jobs are gained through personal networks, it is important to facilitate contacts and meetings with people who are established in the labour market and already have a social network. Some stakeholders argued that lower starting salaries and less rigid regulations concerning employment would facilitate refugees’ integration in the labour market.

Stakeholders highlighted prejudice as an integration barrier for many refugee women. Prejudices come from employees in authorities in particular, who sometimes seem to be under the impression that women from developing countries prefer to be housewives or work part-time rather than being full-time employed. It was further suggested that this perception negatively impacts the behaviour of public officials who are supposed to facilitate the labour market integration for these women.


Despite much effort since taking office, the government has continuously been under fire for failing its integration policy. It is possible to say that integration policies in Sweden are ambiguous and that they have done little to improve the unemployment rates of non-natives. But apart from labour market outcomes, the policy framework in Sweden is welcoming towards foreigners with its liberal family reunification regulations, lack of mandatory tests, and relatively easy access to residency and citizenship. There are no signs that the government will close its open door labour migration policy. The question is rather whether the government will succeed in improving the implementation of its integration reform while getting rid of unnecessary thresholds into the labour market.

Note: This is a shortened version of the original article, which was published in the December 2013 edition of the Monthly Policy Review. Footnotes and graphs are only available in the subscriber version of this article.