High Taxation Rate
- social benefits provided by Swedish govt → lengthy parental leave, unemployment allowances, healthcare and free education → made possible by high taxation rate
- 2019 → highest income earners in Sweden → pay income taxes of 57.2% → one of highest in world
- besides direct taxation → in form of income tax → there is also indirect taxation → form of Value added Tax (VAT)
- 2019 → VAT was 25%
Ageing Population
Swedish elder care → largely funded by taxes and govt grants
- Elder care cost→ estimated to increase → as country’s population continues to age
Sweden has one of highest life expectancy in world
- ageing pop. + high life expectancy → govt spending will increase over time → esp. in areas of health and long term care
As more people retire → smaller working pop. → to bear increased cost
- need to increase employment rates, lengthen employment years of those still working, or raise taxes on working pop.
High Immigrant Unemployment Rates
- Sweden → one of the larger immigrant populations.
- challenges in integrating immigrants into workforce → widens income gap between them and citizens
Challenges in Integrating Immigrants into Workforce
| Mismatch between Skills and Jobs | Difficulty in Assessing Skills |
|---|---|
| Immigrants → may not have received → educational opportunities → in home countries → leaving them unable to take up unfilled jobs in Sweden | If immigrant → training experience not in Sweden → employers → have difficulties → assessing their actual competency |
| Resulted in → high unemployment → for low skilled workers/ immigrants | Processing time for foreign qualifications is long |
| Resulted in → highly educated immigrants → with foreign qualifications → facing challenges in finding suitable jobs. |