Nordic countries refers to the Nordic countries excluding Sweden and the EU/EFTA refers to the EU/EFTA excluding the Nordic countries. Source: United Nations  Economic effects of migration The increasing migration has become a hot issue in recent years, partly due to the difficulties in integrating those born abroad into the labour market. The economic consequences of migration have also been debated at length. The perspective has then often been how increased immigration affects public finances. This is an important question, but it is not so easy to analyse, as migration can take many different forms. It can be permanent or temporary. It can involve refugees, labour immigration or family member immigration. In addition, the reasons for migration vary, although they are most often political or financial (in labour market terms). All of this is important when evaluating the consequences of migration. Labour immigration normally benefits common welfare, on condition that there is a redistribution to the groups that might lose out. If the right competence is not available within the country, it is important for companies to be able to recruit from abroad to maintain competitiveness. It is then not just a question of highly qualified labour. Labour immigrants can today be anything from IT specialists and graduate engineers to construction workers, assistant nurses and cleaners. The consequences of the refugee immigration are more difficult to analyse. In the short term, one can expect costs before the migrants become established on the labour market. However, there are also more long-term consequences to be considered.
The employment rate and labour force participation are both high in a European perspective, see Figure 7a, which shows the employment rate in Sweden compared with the euro area. A large part of the difference is due to the labour supply among women and older people being relatively high in Sweden. In other words, a lot of things work well in the Swedish labour market from a European perspective, but there are some challenges. Although unemployment is lower than the average for the EU countries, it is not among the lowest, see Figure 7b. Moreover, we have a marked division in the labour market between those born abroad and those born in Sweden. For those born abroad, unemployment is 16 per cent, but for those born in Sweden it is only 4 per cent, see Figure 8a. Unemployment among those born abroad is also high in relation to other European countries, see Figure 8b. An important challenge for the labour market going forward is thus the integration of those born abroad. 17 See, for instance, Lindé and Trabandt (2019) who show that when the economy is hit by major negative changes, companies and unions delay changing prices and wages, which leads to a flatter Phillips curve. Another possible explanation for the flatter Phillips curve could be that the central banks’ monetary policy has become more effective, see McLeay and Tenreyro (2018). 12 [24]  Figure 7.