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Labour market.

5.1 Summary

The labour market situation continued to worsen in the summer of 1992, when employment went on falling steeply while unemployment climbed above 5 1/2 per cent. With vacancies at an exceptionally low level and an increased inflow of discharge notices, a further deterioration is clearly to be expected.

Having reached a peak in 1990, the number in employment fell markedly and comparatively smoothly; by the summer of 1992 the drop amounted to 2Z5,000 persons or about 5 per cent. During 1991 the declining demand for labour was accompanied by a substantial contraction of the labour force from the high level in the years of overheating (Diagram 5.1); this tended to subdue the rise in unemployment. In 1992 labour supply has fallen less markedly but employment has continued to plummet, causing unemployment to rise more rapidly.

The number of unfilled vacancies decreased in 1990 in particular but also in 1991 and a new low of about 10,000 was reached this summer. The sector levels were also lower than ever before and a downward tendency is still evident for vacancies in services, where demand remained buoyant for longer than in industry and construction. The picture of demand is equally bleak in the labour shortage data from the Business Tendency Surveys for industry, construction and services.

The number in the labour force swung from an increase to a fall at the turn of 1990, mainly due to decreased participation rates for youth, a group that is notably sensitive to economic activity. Decreased rates were also noted for men and, for the first time, for women aged 25-64 years. The drop in supply, however, was not just a direct reaction to the weakening of the labour market. In that participants in labour market training (as well as those in the new youth training scheme) are not classified as belonging to the labour force, the increase in such training between the first halves of 1990 and 1992 - from less than 40,000 to not quite 90,000 - was registered as a markedly negative effect on supply. The major contraction of the labour force in the second half of 1991 and the first half of 1992 is thus in part a reflection of the composition of labour market policy measures.

The number in the labour force fell 0.3 per cent from 1990 to 1991 and 1.8 per cent between the first halves of 1991 and 1992. Labour supply in hours fell 0.6 per cent from 1990 to 1991, while a marked reduction of absenteeism meant that between the first halves of 1991 and 1992 the hourly supply fell only 1.1 per cent.

The number in employment dropped from 1990 to 1991 by almost 70,000 or about 1.5 per cent. The fall was confined to the business sector, where it occurred mainly in mining and manufacturing. The number was unchanged at both central and local government authorities. In construction and private services the curves for employment turned downwards in 1991, having risen in 1990, resulting in a marginal fall in annual terms. For employment in services, a fall in trade was offset by increases in banking and insurance.

Between the first halves of 1991 and 1992 the Labour Force Surveys show that the number in employment fell more than 170,000 or almost 4 per cent. The drop for men was more marked than for women, reflecting overall decreases of 80,000 and 40,000 in industry and construction, respectively. Employment also fell in other sectors, by 30,000 for private services and by 2,000 and 10,000 for central and local government authorities, respectively, where the seasonally-adjusted level had begun to decline in the second half of 1991.

Having been very low in 1989 and the beginning of 1990, unemployment rose according to the Labour Force Surveys at an accelerating rate to a seasonally-adjusted level of about 250,000 or 5.5 per cent in the summer of 1991 (Diagram 5.2). This curve, however, should be interpreted with caution because its course is affected by the measures of labour market policy and the seasonal pattern may well have changed in connection with the marked shifts in the labour market series. Besides affecting youth, the increased unemployment largely concerns men aged 25-54 years. Long-term unemployment (more than 26 weeks) rose between the first halves of 1991 and 1992 from 18,000 to almost 45,000. At the same time, the average duration of current periods of unemployment increased from 16.7 to 19.6 weeks, which can be compared with 19 weeks in 1987.

The annual size of the labour force in 1992 is estimated to be 70,000 down on 1991 and labour supply in hours is calculated to fall 0.9 per cent, mainly (0.7 of a point) as an effect of the labour market policy measures. Adjusted for calendar differences, the number of hours worked in 1992 is expected to fall 3.3 per cent from 1991. The unemployment rate would then rise to 5.0 per cent, while the number in employment falls more than 170,000.

In 1993 the number in the labour force is expected to fall almost another 70,000 and the hourly supply 1.2 per cent (of which I point because of increased participation in measures outside the labour force). Together with a fall of 2.7 per cent for labour demand in hours, this would push the unemployment rate up from 1992 to 1993 by 1.5 points to 6.5 per cent and the number in employment would then far by about 130,000.

In 1994 labour demand is still expected to be weak; the number of hours worked is assumed to decrease by 0.7 per cent from 1993 while labour supply falls 0.2 per cent. This assumes that participation in measures of labour market policy is unchanged from 1993 to 1994. Unemployment would then rise to 7.0 per cent while the number in employment falls by 25,000.

The wage bill paid out rose 3.3 per cent from 1990 to 1991 (excluding effects of broader tax bases). Wage bill costs rose 3.5 per cent, a negative effect of 2 points from the employment component being more than offset by an hourly wage rise of 5.6 per cent, with equal contributions from negotiated increases and wage drift. Due to changes in social security charges and effects of the tax reform, hourly costs rose 1.5 points faster than wage costs.

In 1992 the weak labour market has continued to curb wage increases markedly as a result of greatly reduced wage drift. Negotiated wage increases for 1992 are estimated at 2.7 per cent or somewhat less than in 1991. The total hourly wage rise is estimated at 3.5 per cent. Employment is calculated to make a negative contribution of 3.6 points, so the wage bill paid out should fall 0.3 per cent (excluding sick wage for the initial 14 days of an illness). Payroll costs for the sick wage are being offset by a lower payroll charge; other changes in social security charges lower hourly costs by 0.3 of a point, giving an overall increase of 3.2 per cent thus year.

In 1993 persistently weak labour demand is expected to limit wage increases to 3 per cent; together with declining employment this is estimated to raise the paid-out wage bill 0.2 per cent. Allowing for lower payroll charges, hourly costs are calculated to fall 0.2 per cent.

In 1994 the hourly wage rise is estimated at 4 per cent and with some contraction of employment, the wage bill paid out would rise just over 3 per cent.

5.2 Labour supply

5.2.1 Persons in the labour force

In 1991 the number in the labour force fell 0.3 per cent from 1990 because the population grew 0.6 per cent but the contribution from the overall participation rate fell 0.9 per cent. Between the first halves of 1991 and 1992 the number in the labour force went on failing because participation rates dropped sharply. The weak labour market contributed to this: participation rates tend to fall when activity is declining because a decreased demand for labour is liable to weaken the propensity to look for work.

Participation rates fell considerably more among youth (16-24 years), an age group that is particularly sensitive to economic activity, than in the age group 25-64 years. In both groups the fall was also somewhat greater for men than for women because the former are employed to a greater extent in the sector exposed to international competition, where the recession has been more marked to date than in the public sector, which employs the highest proportion of women. Participation by adult women has shown a rising trend since the early 1970s, with a steady increase that differs clearly from the rate for men, which with some lag has largely followed the fluctuations in activity. Rising education among women, the expansion of child-care facilities and public sector growth have paved the way for this. Last year and this, however, the participation rate has also fallen for adult women.

Participants in any form of training are classified as not belonging to the labour force. In that the number in labour market training doubled between the first halves of 1991 and 1992, the number in the labour force fell 0.6 per cent. In the second half of 1992 the National labour Market Board is augmenting its training arsenal with two new measures: a youth training scheme and a temporary development scheme. Together with the prospect of a persistently high level of labour market training, between the second halves of 1991 and 1992 these innovations are calculated to lower labour supply 0.8 per cent. The expansion of training would then reduce the annual supply in 1992 by 0.7 per cent. Employers have proved highly interested in the traineeships for youth, for which participation is calculated to rise to around 75,000 at mid 1993. The planned level of participation in the temporary development scheme should also be reached in the first half of 1993 but some contraction of labour market training is foreseen from the level in 1992. The increase in training measures is then calculated to reduce labour supply by a total of about 1 per cent in 1993. As the labour market is likely to remain bleak in 1994, we envisage that the overall level of training measures will be unchanged from 1993.

The efforts for training are accordingly tending to lower labour force participation this year as well as next. Changes in participation are estimated to lower the number in the labour force by almost 2 per cent this year and next, followed by less than 0.5 per cent in 1994. But as population growth is assumed to continue in the forecast period, partly because immigration is expected to exceed emigration, the number in the labour force will not fall quite as much as this.

5.2.2 Labour supply in hours

In addition to the size of the labour force, the hourly supply of labour is affected by average hours worked and long-term absenteeism. Changes in average hours worked (or the average working week) are directly dependent on shifts in regular hours, overtime and short-term absence. Various structural factors also contribute, such as changes in the sex ratio (the proportions of men and women in employment).

In 1991 average hours worked shortened no less than 0.7 per cent and to the same extent in each half-year. The recession contributed and so did an extension of the annual holiday by two days. In the first half of 1992 average hours worked continued to shorten from the year before but the tendency was weak and came from shifts in the sex ratio: men were hit by unemployment to a greater extent than women, who accordingly increased their share in employment; as women in general work shorter hours than men, this tended to lower average hours at total level. Apart from this, average hours worked did not change, some reduction of short-term absenteeism (less than one week) being offset by decreased overtime and shorter regular hours. These tendencies have been evident since activity began to slacken early in 1990 and are characteristic of a downward phase. In 1993 the withdrawal of two days holiday is calculated to contribute to an increase in average hours worked and thereby to labour supply in hours by 0.6 per cent. The net effect, however, is judged to be somewhat less because the increased hourly supply also reduces the need for overtime, which is accordingly expected to fall. As the labour market is likely to remain weak next year and in 1994, the effect on average hours worked should be downward; in 1993, however, we count on this being counteracted by lower short-term absenteeism as a result of decreased sickness benefits.

A fall in long-term absenteeism (more than one week) implies an increased hourly supply; between the first halves of 1991 and 1992 this factor added 0.8 per cent to labour supply in hours. A fall in sick leave was the main explanation, accompanied by decreased absenteeism for national service and child care, for instance. Long-term absenteeism is expected to go on falling in the second half of 1992, followed by an unchanged level in the rest of the forecast period.

The combined effect of the changes in the size of the labour force, average hours worked and long-term absenteeism, lowered labour supply in hours more than one per cent in the first half of 1992. A marked drop in participation rates was partly offset by decreased long-term absenteeism and higher population growth. In the second half-year these factors are calculated to go on lowering the hourly supply by 0.5 per cent. A further fall in the hourly supply is foreseen in 1993, mainly from a sharp drop in participation rates, partly offset by continued population growth and an increase in average hours worked. A further, very slight fall in the hourly supply is foreseen in 1994.

5.3 Labour demand

The number of vacancies has been falling very steeply since the spring of 1990 and although the tendency slackened in 1992, the current overall level of unfilled vacancies is about 10,000, considerably fewer than the low in 1981-82 (Diagram 5.3). The gap between new and unfilled vacancies has widened, particularly in manufacturing, indicating that vacancies which arise are filled more quickly. The patterns in the various sectors are similar but their timing differs. In industry and construction the number of unfilled vacancies was already exceptionally low at the turn of 1991 and the level in trade, where the fall began later, also seems to have reached a low at that time. Unfilled vacancies in private services, on the other hand, went on falling this year, while the steep drop for public services seems to have been checked at least temporarily in 1992.

Labour shortages in mining and manufacturing, construction and private services are reported in the quarterly Business Tendency Surveys. These data also indicate that labour shortages are virtually non-existent in construction and very low in mining and manufacturing, though in engineering the shortage of salaried technicians did tend to rise in the summer of 1992. Plans for the second half of 1992, however, point to further cuts in employment in all three sectors.

5.4 Employment

In 1990 the number in employment according to the Labour Force Surveys was comparatively stable, having risen substantially in the late 1980s. Around the turn of 1990 employment then began to fan sharply and has continued to do so at a largely undiminished rate (Diagram 5.2). By the summer of 1992 the drop totalled 225,000 persons or 5 per cent.

From 1990 to 1991 the number in employment dropped more than 75,000 (1.7 per cent), most of whom (60,000) were youth (16-24 years), reflecting a falling participation rate. Unemployment among youth went up by little more than 15,000. The fall in employment also affected men more than women, particularly in the adult group (25-64 years). As the number of hours worked decreased 2 per cent according to the labour Force Surveys, average hours worked are calculated to have fallen 0.3 per cent. According to the National Accounts, the number in employment fell 1.5 per cent 1990-91, while the number of day-adjusted hours decreased 2.1 per cent.

The sectorwise development of employment according to the National Accounts is presented in Table 5.5. Changes in the volume of hours are based on the registered number of hours worked; unlike the Labour Force Surveys, they accordingly include the effect of calendar differences between years.

The fall in employment in 1991 occurred entirely in the business sector, where the major share (60,000) came from mining and manufacturing, where extensive cuts have been made since the turn of 1989, as illustrated by the seasonally-adjusted curve for the number of industrial workers in Diagram 5.5. Employment also went on falling in agriculture and forestry. In 1991, moreover, employment began to fall in construction but the annual change from 1990 was comparatively small (2,000). This was accompanied by a downward tendency for employment in private, services, where a drop of 2.5 per cent (17,000) for distributive trades, hotels and restaurants was partly offset by an increase in banking and insurance, mainly as a consequence of growth in the course of 1990. Another point to note is that in construction and services, employment was definitely weaker calculated in hours than in persons.

In the public sector the number of employees was unchanged from 1990 to 1991 for both central and local government authorities. At the same time, the number employed m municipal measures of labour market policy rose 8,000.

Between the first halves of 1991 and 1992 the Labour Force Surveys indicate that the number in employment fell more than 170,000 or almost 4 per cent. The drop was still most marked among youth but also substantial for the adult group (25-64 years). As a consequence of the sectorwise pattern, men were clearly more affected than women in both age groups. The level of hours worked fell 3.1 per cent, implying that average hours worked, including long-term absenteeism, rose 0.8 per cent. Calendar differences between the first halves of 1991 and 1992 give a marginal increase in the volume of hours, so the number of hours actually worked is calculated to have fallen 3.0 per cent.

The slump in employment between the first halves of 1991 and 1992 occurred mainly in industry and construction, where the Labour Force Surveys report cuts of 80,000 and 40,000, respectively, but employment also declined in other sectors. In private services the drop totalled 30,000 and came mainly from further reductions in distributive trades, hotels and restaurants. Employment at central and local government authorities turned downwards in the second half of 1991 and the fall between the first halves of 1991 and 1992 amounted to 2,000 and 10,000, respectively. At the same time, municipal employment in measures of labour market policy rose 13,000.

The employment forecasts for 1992, 1993 and 1994 are presented together with productivity estimates in Section 5.5 below.

5.5 Production, productivity and employment

Sectorwise estimates of productivity and employment in the period 1991-94 are presented in Table 5.6, starting from the following assessment of production.


Total production (GDP calculated from the expenditure side at factor values) is falling continuously in the period 1991-93, by a total of about 4 per cent, and a slight recovery is not expected until 1994.

Public sector production was still rising last year but in this and the next two years we count on annual reductions in the region of half of one per cent.

Business sector production fell as much as 2.3 per cent last year according to the preliminary National Accounts. The fall this year will probably be considerably smaller but with very weak domestic demand we foresee another substantial drop in 1993. The forecast for 1994 points to some recovery, with an increase in production of just over one per cent.

The downward phase began in mining and manufacturing, where production fell very sharply in 1991 and more moderately this year. In 1993 the decline is expected to level out, followed by a rise of about 3.5 per cent in 1994. In construction the recession is expected to last much longer; we count on a total fall in production of about 20 per cent in these four years, with the weakest period in 1993-94. The picture of private services is uneven and difficult to interpret but it looks as though 1993 will be a very weak year.

Labour productivity in the business sector was slack in the late 1980s and early |90s but appears to have improved substantially this year to an increase of more than 3.5 per cent. In the next two years we count on productivity gains at approximately half this rate, which must also be regarded as relatively favourable. The productivity assessment for 1993 assumes, for instance, that the labour market policy measures tend to raise productivity. Participation in youth training and temporary development schemes is expected to total almost 100,000 next year and this group makes some contribution to production but not to employment in hours because it is classified as outside the labour force.

The picture of productivity differs considerably between sectors, with strong increases in industry and construction, for instance. The propensity to cut work forces promptly there seems to have been considerably greater than in earlier slowdowns. But even the calculated improvement in productivity in services in 1992 and 1993, by 1.9 and 1.2 per cent, respectively, must be regarded as strong in relation to conditions for production here.

This picture of changes in production and productivity imply a very weak outlook for employment. In the total economy, the contraction of employment in hours averages more than 2 per cent a year.

With the improved productivity growth this year, the comparatively moderate fall in total production hits employment very heavily, with an overall drop of more than 3 per cent in hours or 170,000 persons. The decline in employment affects every sector, including the public authorities, and is particularly marked in industry and construction.

The somewhat weaker productivity gain in 1993 eases the downward pressure on employment. Although production declines more sharply than in 1992, the drop in employment is less marked, totalling just over 2.5 per cent in hours or almost 130,000 persons. The drop in industrial employment stops at 2 1/2 per cent but in construction, where the downturn in production is very steep, the contraction of employment also accelerates to a rate of 11 per cent in hours or more than another 30,000 persons.

In 1994 we count on a renewed increase in total production but the swing will not be sufficient to turn the negative trend in employment, which will go on falling by almost one per cent or 25,000 persons. Industrial employment should begin to recover, rising about one per cent. In construction, on the other hand, employment will go on falling rapidly but the decline in private services may level out. For public sector employment we foresee a further reduction by between one-half and one per cent.

5.6 Unemployment and labour market policy

Unemployment began to rise from a very low level in the spring of 1990 and a further sharp increase was noted in 1991, when the annual level was 53,000 higher than the year before. This is the sharpest increase in unemployment since the Labour Force Surveys began in 1970. The highest level of unemployment in the previous slowdown in the early 1980s was about 130,000 persons or 3.3 per cent of the labour force, whereas on this occasion the level in August was more than 250,000 persons or 5.8 per cent of the labour force and is expected to go on rising.

Unemployment is still rising faster for men than for women (Diagram 5.6), partly because the level is very high in industry and construction, 11.3 and 17.4 per cent, respectively, in August 1992. About 60,000 salaried employees are now out of work, which is twice as many as in the summer of 1991; here, too, men are in the majority. Despite additional measures of labour market policy, youth unemployment is likewise rising; the unemployment rate for youth (16-24 years) moved up above 10 per cent in the second quarter this year and went on rising in the summer.

In the upper age group (55-64 years) unemployment in August was still only 3.4 per cent but this was because an increased number of persons have left the labour force.

Long-term unemployment (over six months) has risen markedly. In the first half of this year the number was 26,000 higher than a year earlier; in the second quarter this year the group made up almost one in four of all those out of work.

Notices of lay-offs or dismissals affected more than 200,000 persons in 1991, which is considerably more than in the previous slowdown. About 70 per cent of these notices were in manufacturing and this is now reflected in the high level of unemployment there. The total number of notices in the first half of 1992 remained very high but the sharp increase seems to have ceased (Diagram 5.7).

An increase is reported, however, for the number of discharge notices and it comes from both private and public services. In manufacturing the number of notices in the second and third quarters of 1992 was lower than a year earlier.

Efforts of labour market policy have been greatly expanded in 1991 and 1992 as the labour market has weakened. Labour market training in particular has been stepped up, whereas in earlier slowdowns it was relief work that predominated. More than 100,000 persons were participating in some form of labour market training, including internal training, in the first half of 1992. Another 10,000 or so were occupied as training reliefs, a system introduced in 1991 to provide stand-ins while regular employees undergo training.

The total number of participants in stabilizing measures of labour market policy rose between the first halves of 1991 and 1992 by 74,000 to a total of 143,000, that is, from 1.5 to 3.2 per cent of the labour force.

A new youth training scheme has been introduced as of September 1992 as a form of practical in-plant labour market training for youth (16-24 years). The participants do not count as employees, being available for training, guidance and job-seeker activities arranged by the Employment Service. The introduction of this scheme marks the end of induction places and relief work for youth.

The "crisis package" of economic policy measures presented by the Government and the Social Democrat opposition in September 1992 included greatly increased efforts of labour market policy. A new measure is to be introduced, referred to here as a temporary development scheme; it will provide for a return to working life with a training grant at the same level as the unemployment insurance benefit, thereby affording greater protection from the expiry of benefits. This measure is expected to cover 20,000 persons. The youth training scheme, moreover, is to be expanded by 36,000 places; firms are highly interested and a total of about 75,000 participants is expected. The number of places for training reliefs is to be doubled, accompanied by an additional 30,000 places in relief work. In order to contain registered unemployment, a total of 25,000 places will be added to the facilities for upper secondary education, municipal adult education, the folk high schools and university education.

We estimate that a total of almost 230,000 persons will participate in stabilization measures in 1993 or over 5 per cent of the labour force. Considering the very weak outlook in the labour market, we also count on an unchanged level in 1994.

The labour supply estimates for 1992 point to a fall in hours of almost one per cent. Together with a contraction of employment by more than 3 per cent, this implies that unemployment moves up from 2.7 per cent in 1991 to 5 per cent this year. A further increase in unemployment is foreseen in 1993 and 1994. Next year labour supply is expected to drop more than one per cent, mainly as a consequence of the greatly increased efforts of labour market policy. Although employment is expected to fall more than 2 1/2 per cent the increase in registered employment is therefore considerably smaller, 1 1/2 points to a level of 6 1/2 per cent of the labour force. In 1994 the fall in labour supply stops at about two-tenths of one per cent; with a further contraction of employment by just over half of one per cent, unemployment would rise about half a point to 7 per cent, corresponding to approximately 310,000 persons.

5.7 Wage costs

5.7.1 All employees

In 1991 wage increases became considerably more subdued, mainly due to the deteriorating situation in the labour market. The average hourly wage for all employees rose 5.6 per cent, the lowest annual figure in the history of these statistics, which began in 1960. The negotiated component contributed less than 3 per cent. The carry-over from 1990 settlements was comparatively large, particularly in the local government sector. For much of the labour market the new settlements were in line with the stabilization agreement from the Rehnberg Commission and contributed little more than 1/2 per cent. The longer holiday contributed as much. Together with decreased employment, the hourly wage rise gave an increase in wage bill costs of 3.5 per cent for 1991, with a somewhat lower increase in the wage bill paid out.

Changes in social security charges, including broader bases as a consequence of the tax reform, meant that total labour costs rose 1.5 per cent on top of the hourly wage rise.

In 1992 wage increases have been checked still more. The two-year stabilization agreement included a deduction procedure for unduly large wage increases in 1991. Such increases occurred and deductions totalling 0.8 per cent have been made in many parts of the labour market. The average negotiated increase for all employees was then 2.7 per cent. With persistently low labour demand, wage drift decreased markedly in the first half of this year and we count on a figure of less than 1 per cent for 1992. The total hourly wage rise would then be 3 1/2 per cent, a very low figure historically.

As of 1992 employers pay a sick wage for the first 14 days of an illness, which adds to the wage bill. With a forecast of -3.6 per cent for the employment component, both wage bill costs and the wage bill paid out are estimated to rise 3/4 per cent including sick wages (a fall of 1/4 per cent excluding sick wages).

The abolition of the wage tax lowers social security contributions, so the overall increase in labour costs stops at 3.2 per cent for 1992. Lower payroll charges compensate for payroll costs for the sick wage.

In 1993 unemployment is expected to rise to a record level and the result from the estimated wage equations points to an even more subdued wage rise. The settlements expire early in the year and it is to be expected that some groups demand compensation for low wage increases in 1991 and 1992. We count on a total hourly wage rise of 3 per cent. Employment is expected to fall about as much as this, so both the wage bill paid out and wage bill costs would go up 0.2 per cent. The "crisis package" announced a reduction of payroll charges by 4.3 per cent, which is equivalent to 3.1 per cent of total labour costs (incl. social charges). The combined result is a reduction of labour costs by 0.2 per cent in 1993.

In 1994 unemployment is expected to remain high and the situation in the labour market is hardly likely to improve. Employment is calculated to go on falling but labour demand may begin to recover in some key sectors. The hourly wage rise in 1994 may be somewhat higher than in 1993 and we count on a figure of 4 per cent. With employment forecast to fall 3/4 per cent, the wage bill would rise just over 3 per cent.

5.7.2 Industrial employees

Hourly earnings for industrial workers rose 5.5 per cent in 1991 according to monthly figures from Statistics Sweden. The increase for salaried staff was 5.3 per cent. Changes in social costs, including the broadening of bases for payroll charges, also raised the level of hourly costs. Total hourly costs for all industrial employees accordingly rose 7.1 per cent in 1901.

In 1992 hourly earnings in industry are estimated to rise 4 per cent as a result of settlements and wage drift combined. The figure for the negotiated component, including carry-over, is about 2 per cent. The abolition of the wage tax has lowered the level of payroll charges and the overall level of industrial wage costs is expected to rise 3.7 per cent in 1992.

In 1993 we count on an hourly wage increase of 3 per cent in mining and manufacturing. As a result of decreased social charges, total wage costs would fall 0.2 per cent.

In 1994 the prospect of some recovery in the industrial labour market points to a wage increase for all industrial employees of 4 per cent.
Table 5.2 Participation rates
Annual and seasonally adjusted half-yearly data (monthly
 1991 1992 1993 1994
Men 16-64 years 86.1 84.3 82.9 82.6
of which: 16-24 years 65.3 61.0 57.2 57.0
 25-64 years 91.1 89.9 88.8 88.4
Women 16-64 years 81.7 80.4 78.7 78.3
of which: 16-24 years 64.4 60.8 56.8 56.5
 25-64 years 85.8 84.9 83.7 83.2
Total 16-64 years 83.9 82.4 80.8 80.5
Sources: Statistic Sweden and the Institute.
Table 5.7 Sectorwise changes in employment
 1991 1992 1993 1994
Agriculture and forestry -7 -14 -3 -4
Mining and manufacturing -58 -80 -27 -9
Construction -2 -29 -32 -22
Private services -6 -32 -55 2
Central authorities -1 -1 -3 -3
Low authorities 0 -17 -8 -7
Residual 6 0 0 0
Total -68 -173 -128 -25
Sources: Statistics Sweden and the Institute.
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Publication:The Swedish Economy
Date:Sep 22, 1992
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