## 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](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/14/tracing-the-slowdown-of-labor-productivity-growth-sweden-566202)

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## Bibliographic details
- Authors: Xin Tang
- Published: April 15, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229009485.018

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### 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.

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/04/14/tracing-the-slowdown-of-labor-productivity-growth-sweden-566202_