1. Economic life cycle in Sweden: 1980s, 1990s, & 2000s Daniel Hallberg Institute for Futures Studies, Stockholm
1 Demographic background
2 Institutional background
3 Labor and consumption profiles over life and changes
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2. Sweden is a country with a large public sector
High taxes but also built out social security and free of expense health care; child care, schools, universities etc.
Economic growth about 2-3 percent during the last 15 years
Is a small open economy heavily dependent on exports and imports
Joined the EU in 1995
Has not joinded the Euro
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3. Economic growth Sweden has a large public sector
High taxes but also built out social security and free health care, child care etc.
Economic growth about 2-3 XXX percent during the last 15 years
Is a small open economy havily dependent on exports and imports
Joined the EU in …XX
Have not joinded the Euro
Economic growth
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4. Sweden has a large public sector
High taxes but also built out social security and free of expense health care, child care schools, universities etc.
Economic growth about 2-3 percent during the last 15 years
Is a small open economy heavily dependent on exports and imports
Joined the EU in 1995
Has not joinded the Euro
Exports as share of GDP
Imports as share of GDP
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5. Income development (averages)
All
Women
Men
Source: Johansson (2006)
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6. Economic equality (Gini)
All
Women
Men
Source: Johansson (2006)
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7. Large swings in birth cohorts… create large swings in the labor force
b) Age composition
Large swings in birth cohorts… create large swings in the labor force
1940-boomers
1960-boomers
2005
Baby-boom
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8. Large swings in birth cohorts…create large swings in the labor force
b) Age composition
Large swings in birth cohorts…create large swings in the labor force
1940-boomers
1960-boomers
Baby-boom
2005
2015
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9. University diplomas by age
c) Education, family formation, and entry into the labor market are delayed
University diplomas by age
Kvinnor
Women
Aged 25 or older
Aged 24 or younger
Aged 25 or older
Aged 24 or younger
Män
Men
Aged 25 or older
Aged 24 or younger
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Source: SCB

10. Delayed childbearing
Age of mother at birth
Source: SCB
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11. Delayed childbearing 24
Age of mother at birth
Source: SCB
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12. Delayed childbearing Age of mother at birth 24 32 Source: SCB
Age of mother at birth
Source: SCB
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13. Swedish women combine work and small children
Source: Labour force surveys
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14. d) Labor force participation rates 55-64, 2004
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15. d) Labor force participation rates 55-64, 2004
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16. 2 Swedish institutional background a) Benefits
Comprehensive social income insurance
Sickness
Unemployment
Parental leave
Nominal fee health care provisions
Free education at all levels (incl subsidised student loans for consumption expenses)
Notional defined contribution pensions
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17. b) Swedish institutional background Taxes
Local income taxes around 30 percent
State income taxes percent above ceiling
Ceiling around $50 000
Payroll taxes and fees percent on top of gross income
Capital income tax flat rate 30 percent
Wealth and real estate taxes around 2 percent
Value added taxes 6, 12 and 25 percent
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18. c) Subsidy systems 1 Education
Entitlement daycare/pre-school (1-12) low fee high subsidies, 80% of pre-school children,
Compulsory school (7-16) Pre-school 6 years added. Public financing (even if private operation)
Upper secondary school (3-4 years) >90% enrolment.
Tertiary education free (but rationed) 50% enrollment (also vocational education)
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19. Subsidy systems 2 Transfers
Universal child allowance 100 EUR a month up to years.
Parental leave insurance (80% or more regular income) 390 days (another 3 months at low flat rate) flexible uptake
Until child 12 years parents can stay home for care of sick child at the same replacement rate
Means tested housing allowance mainly supports single parents.
Students get an extra allowance if they have children.
One of the parents, generally the mother also gets extra pension rights for each child.
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20. 3 Labor and consumption profiles a) Data
Labor earnings, and other income data, taxes, transfers, etc.
* Income data from LINDA
Public consumption
* Generational analysis data base
Ministry of finance
real data
simulated data (SESIM)
* For we rely on a broad array of official data sources from Statistics Sweden
Private consumption
Household expenditure surveys (HUT)
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21. 3 Labor and consumption profiles a) Data
Labor earnings, and other income data, taxes, transfers, etc.
* Income data from LINDA
Public consumption
* Generational analysis data base
Ministry of finance
real data
simulated data (SESIM)
* For we rely on a broad array of official data sources from Statistics Sweden
Private consumption
Household expenditure surveys (HUT)
Years with both labor earnings and consumption
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22. Generational analysis (GA) data & LINDA
LINDA is a 3% random sample of the population, about 300,000 per year
Income and tax registers, public transfers, taxes, imputed payroll fees.
The GA data set is a 19% random sample of the LINDA data base, corresponding to about 58,000 observations per year.
Gender, age and year specific estimates of public consumption on education, health, elderly care, etc.
The GA follows individuals, and their households, back to the 1930s, but here we present data from
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23. Private consumption from Household expenditure surveys (HUT)
Household expenditure surveys (HUT) are avalible for 12 years
Covers sample persons aged 0-79 & their hh members
Sample sizes and non-response rates vary, e.g. in 2003, random sample of 4000 in ages 0-79, with 42% non-response
To some extent sample weights compensate for this
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24. Labor earnings
Scaled by YL ages 30-49
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25. Public and private consumption
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26. b) Life Cycle Deficit
Scaled by YL ages 30-49
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27. Life Cycle Deficit
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28. Life Cycle Deficit
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29. c) Changes between 1985 and 2003
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30. c) Changes between 1985 and 2003
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31. c) Changes between 1985 and 2003
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32. Comparison per capita profiles of labor income and consumption, 1985 and 2003
Increased retirement age
Delayed LM entery
About the same private consumption by age
Increased public consumption at older age
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33. Delayed production and consumption: Trends in average age of production (labor income) and consumption, weighted by population
Another way to look at this is to calculate the average age of production and consumption
These two are about the same for Sweden
But there have been an increase in both over time
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34. Age composition is partly the answer: Life cycle deficit weighted by population current year
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35. Life cycle deficit weighted by population year 1985
Much of the differences disapear as we weight both profiles by age composition in 1985
There is some minor differences left
These reflect increased retirement age, increased entery age, and increased public spending on the old
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36. 4 Conclusions
In an international comparison, Sweden has a built out public sector with high public expences for the eldely and for the young
There is also high LFP among women, one effect of public child care at eary ages
Changes in production and consumption towards - on average- higher ages between 1980s and 2000s
Mainly increased public consumption at higher ages
Some reflect increased age of retirement
However the main impression is that per capita profiles seem very stable
Data is still preliminary, and the time span presented here is rather short
The major data limitation is for private consumption/expenditure
Both in terms of the time period covered and in data quality
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37. Thanks for your attention!
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