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Employment Projection 2018, projection to 2040 in three scenarios

Older people are expected to work longer

Statistical news from Statistics Sweden 2019-01-31 9.30

According to the main scenario of Statistic Sweden’s latest employment projection, the number of employed persons aged 16–74 is expected to increase by about 691 000 to just over 5.5 million between 2016 and 2040. Older people are also expected to work longer hours than they do today. Foreign born persons are expected to make up most of the increase in employment.

Large differences depending on the country of birth

The main scenario is based mainly on assumptions that older people and foreign born persons will be more active on the labour market than they are today. According to Statistics Sweden’s projection, the average time that foreign born persons have been living in Sweden is expected to increase during the projection period. As employment rates among foreign born persons increase the longer they have lived in Sweden, employment rates among foreign born persons are expected to increase.

Number of employed persons aged 16–74, 1997–2040. Projections from 2017 according to the main scenario and scenarios 2 and 3. Thousands
Employment Projection 2018, projection to 2040 in three scenarios

Employment growth will be particularly high among persons born in countries outside of Europe with a low or medium Human Development Index (HDI). In this group, employment is expected to increase by 378 000 persons, or 54 percent of the total employment increase. Employment among foreign born persons from a European or other high HDI country will increase by 121 000 persons. Among persons born in Sweden, employment will increase by 192 000 persons, with most of this growth occurring among persons aged 65 and older.

In scenario 2, employment among older persons is projected to remain at 2016 levels, but employment rates among foreign born persons will increase. Overall, employment is projected to increase by 440 000 persons between the years 2016 and 2040 to 5.3 million. In scenario 2, the number of employed persons born in a country outside Europe with a low or medium HDI is expected to increase by 357 000, or 80 percent of the total employment increase. Employment among Swedish-born persons in this scenario will decrease, mainly because the number of Swedish born persons in the most active working ages 20-64 years is expected to decrease.

According to scenario 3, approximately 5.2 million persons are expected to be gainfully employed, an increase of 350 000 persons compared with 2016. In scenario 3, employment rates among older persons and foreign born persons are assumed to remain at 2016 levels. Despite these assumptions, foreign born persons are expected to account for the entire employment increase in 2016-2040 in scenario 3. Persons born in a country outside of Europe with a low or medium HDI will account for 72 percent of the employment increase.

Dependency burden (total population/employed population aged 16–74), 1990–2040. Projection from 2017 according to the main scenario and scenarios 2 and 3
Employment Projection 2018, projection to 2040 in three scenarios

Note: Time series breaks in 1993, 2004 and 2011

Dependency ratio stable according to the main scenario

According to the most recent demographic projections, Sweden’s population is expected to increase by about 1.5 million persons between 2016 and 2040. Persons who are 65 or older will account for the bulk of the increase. This means that the proportion of older people who are gainfully employed can have for a significant impact on the future dependency burden.

In 2016, the dependency ratio was 2.08. This means that every working person needs to support 2.08 persons including him-/herself. According to the main scenario, the dependency ratio will remain stable at approximately 2.1 throughout the projection period 2017–2040. The main scenario assumes that older people will work more in the future than they do today and that employment rates among foreign born persons will increase the longer they have lived in Sweden. The assumptions that older people work longer have an especially large effect on the dependency ratio.

In scenario 2, in which employment rates among older persons remain at 2016 levels, the dependency ratio is expected to increase by 10 percent to approximately 2.2 in 2040. In scenario 3, in which both employment rates among both older persons and foreign born persons remain at 2016 levels, the dependency ratio increases to 2.24.

Definitions and explanations

  • Statistics Sweden’s latest population projection from April 2018 forms the basis of the Employment Projection.
  • The model is based on development up to 2040 with no fluctuations in the business cycle. Thus, the results show the average development during the projection period.
  • The dependency ratio is defined as the total population divided by the number of employed persons aged 16-74.

Publication

A more detailed presentation of the Employment Projection 2018 is available.

Employment Projection 2018 (summary in English) (pdf)

Feel free to use the facts from this statistical news but remember to state Source: Statistics Sweden.

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Statistics Sweden, Forecast Institute

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