Labor Market Regulations and Outcomes in Sweden : A Comparative Analysis of Recent Trends
This paper analyzes recent trends in Swedens labor market regulations in relation to comparator economies and examines the relationship between labor market regulations and outcomes. The paper finds that the Swedish labor market responded more rapi...
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/04/24261201/labor-market-regulations-outcomes-sweden-comparative-analysis-recent-trends http://hdl.handle.net/10986/21843 |
| Summary: | This paper analyzes recent trends in
Swedens labor market regulations in relation to comparator
economies and examines the relationship between labor market
regulations and outcomes. The paper finds that the Swedish
labor market responded more rapidly to the recent global
financial crisis than the majority of the European Union
economies, which helped Sweden to recover quickly. Swedens
hiring regulations are more flexible than those of many
comparator economies, however, fixed-term contracts of short
duration might have adverse consequences for the economy. In
addition, Swedens regulations on work during the weekly
holidays and mandatory paid annual leave are stricter than
those of the majority of comparator economies. Moreover,
among the economies of the Organisation for Economic
Co-operation and Development, Sweden has one of the largest
differences in employment protection between permanent and
temporary employees, which could lead to a segmented labor
market, where insiders enjoy high job security and outsiders
are largely marginalized. This could be cause for concern,
given that Sweden has a higher share of involuntary
temporary workers among youth and involuntary part-time
workers than both the Nordic and European Union averages.
While protecting employees is important, excessive
protection, particularly if it differs across different
types of employment contracts, has been shown to have
adverse effects on welfare and economic performance. |
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