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EACEA National Policies Platform:Eurydice
Political and economic situation


1.Political, social and economic background and trends

1.4Political and economic situation

Last update: 13 July 2022

Historical context

During the 20th century, in the space of a few decades, Sweden went from a poor agrarian country to an industrial nation. The foundation for growth was the wealth of northern Sweden's forests, ore and hydroelectric power. The value of these natural resources was enhanced by a series of inventions such as the steam turbine, the telephone, the cream separator and the safety match. The rapid economic expansion during the 1950s and 1960s enabled the public sector to be built up and a number of social reforms were implemented. With an insufficient domestic market, major Swedish companies were forced from the start to invest in exporting. This is regarded as one reason why Sweden today has a relatively large number of multinational corporations in comparison to the size of its population.

Sweden’s public finances have permitted special programmes and reforms to be carried out in order to promote economic growth. The 1990s were characterised by major investments in the educational area, with increased rights to preschool, expansion of higher education and the Adult Education Initiative (Kunskapslyftet), which aimed at increasing the competence of adults with low levels of education. Major investments have also been made into health and healthcare.

Based on the results of the referendum on the EMU held in September 2003, Sweden has chosen to remain outside the EMU. Approximately 56% of the voters voted against the euro while approximately 42% voted in favour. The voter turnout in the referendum was over 80%.

Current Situation and Recent Reforms

After the worldwide financial crisis 2008, the government implemented a series of measures which aimed to make it more worthwhile to work and simpler and less costly to take on employees and promote a better match between supply and demand on the labour market. The in-work tax credit, changes in unemployment and sickness insurance, lower social security contributions for employers and self-employed people, and tax credits for household services and for building repairs, maintenance and improvement are a few examples.

The government that was in office 2014-2018 implemented several initiatives to increase employment and welfare. Among these measures investments have been made into the knowledge development and matching that is required for employers to find employees with the correct competence. To promote economic growth the government has invested in developing the welfare system with a permanent resource addition to municipalities of 10 billion SEK/year.

During the years since the financial crisis the Swedish economy and labour market has strengthened. In 2016 Sweden entered into an economic boom. In August 2018 the unemployment rate was at 6.9% which is a decrease compared to 7.4% the year before. The unemployment rate among young people in August 2018 amounted to 8.9% of people aged 18-24.

The September 2018 general elections resulted in a situation where none of the parties gained majority due to the election result not indicating a clear government formation. Eight political parties passed the basic requirement and were elected into the Swedish Parliament (riksdagen). On January 21 2019, Sweden got a new government after several months of work to form a government since the September 2018 general elections. The new minority government is led by the Social Democratic Party (S) and the Green Party (MP). One step in the process of forming the government was a draft agreement signed between the Social Democratic Party (S), the Green Party (MP), the Liberals (L) and the Center Party (C) on January 18 2019. 

Gross Domestic Product, GDP

In total, the Swedish economy or Sweden's GDP, has grown steadily since 1950. In 2019, Sweden's GDP amounted to SEK 5 020 billion. 

Since the mid-1980s, Sweden has exported goods and services for a greater value than what has been imported. The Swedish export of services is less than the goods exports and represents only 30 percent of total exports. The export of services has however grown at a faster rate than goods exports during the 21st century. Service exports were 74 percent higher in 2017 compared to 2007. Although raw materials and processed raw materials still account for a sizable proportion of Swedish exports, the future of Swedish business is said to lie primarily in knowledge-intensive industries, where advantage can be taken of the country’s technological development, infrastructure and high general educational level. Information technology and biomedicine are two such knowledge-intensive sectors in which Sweden has been among the global leaders for years.

Gross Domestic Product Sweden


GDP (Million SEK)

Growth rate

GDP expenditure on education as a % of total GDP


3 308 061


7.8 %


4 155 155


7.2 %


5 020 803


7.5 % (2018)

Source: Statistics Sweden


One of the focus areas of the government that was in office 2014-2018 has been to increase knowledge and equality within the school. To accomplish this, three focus areas have been defined: early interventions, an attractive teacher profession and an equal school.

The government has identified that early interventions are necessary to give every pupil the opportunity to reach the knowledge requirements and get the time that they need with their teachers. To accomplish this more teachers and smaller classes are needed. Examples of initiatives that have been introduced are grants in order to employ more teachers, special needs teachers or other support staff.

Statistics Sweden (Statistiska centralbyrån) and Lärarförbundet (Lärarförbundet) estimate that there will be a shortage of 65 000 teachers until 2025. Examples of initiatives within the area of attractive teacher profession is investments in higher salaries for teachers, less administration and increasing the number of study places in several of the teacher and preschool teacher training programs by providing more resources to universities and university colleges. The teacher salary boost is a state grant in which the government distrubutes 3 billion SEK/year to municipalities/school organisers to increase teacher salaries.

In the Swedish school all children have the same right to a good education and the government supports  municipalities' opportunities to work with asylum seekers.

As a part of the ongoing Adult Education Initiative (Kunskapslyftet) approximately 100 000 new student places will be available within higher education, folk high schools and municipal adult education by 2021.

Source: The Government (regeringen)

Level of Education in 2018 (Population aged 25-64)




Compulsory Education (%)

Upper secondary education (%)

ed. less
than 3
years (%)        

ed. 3
years or
more (%)
about education
missing (%)
Total7 253 350


Women3 652 097


Men3 601 25318




Distribution of costs within the education area (2018)


22 %

Preschool class

2 %

Leisure-time center

5 %

Compulsory school

34 %

Upper secondary school

12 %

University/University college

8 %

Other types of education

17 %

Source: Statistics Sweden