Tracing the Slowdown of Labor Productivity Growth: Sweden
Selected Issues Papers, April 15, 2025
Source details
- Canonical URL
- Tracing the Slowdown of Labor Productivity Growth: Sweden
Other formats
Bibliographic details
- Authors: Xin Tang
- Published: April 15, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229009485.018
Executive summary
- Labor productivity in Sweden is among the highest in Europe but has been experiencing a secular decline since the GFC.
- The decline mirrors trends in other advanced economies.
- A multi-faceted solution is needed to address barriers to resource allocation across sectors and firms.
- Proposed reforms by the authorities’ Productivity Commission could effectively address these issues.
- Given the evolving structure of the Swedish economy, policies that facilitate the growth of services sector firms would be particularly beneficial.
Drivers of Sweden’s strong productivity performance
- Skilled labor force.
- Competitive business environment.
- High R&D investments.
- Deep financial markets.
Evidence of the productivity slowdown and underlying frictions
- Secular decline in labor productivity growth since the GFC.
- Barriers to resource allocation across sectors and firms identified as contributing factors.
Policy recommendations and reforms
- Implement the multi-faceted reforms proposed by the authorities’ Productivity Commission to address allocation frictions.
- Prioritize policies that facilitate the growth of services sector firms given the evolving structure of the Swedish economy.
Content in this bundle
- Sipea2025037