Topping off a 20-year surge of immigrants with a new national record last year, Sweden issued nearly 110,000 resident permits in 2012. The year saw the highest annual number of immigrants on record, according to the Swedish Migration Board (
Migrationsverket). At the northern edge of Europe, Sweden’s population of 9.5 million is now peppered with 200 different nationalities with the largest group (170,000) coming from neighboring Finland.
Measured by surface and gross domestic product (GDP), Sweden, the largest of the three countries on the Scandinavian peninsula, offers an attractive destination paired with generous immigration regulations. Ranked 10th in the 2011 United Nations Human Development Index (UNHDI), which measures life expectancy, educational attainment and income, the country is a magnet for foreigners who readily flock to the home of famed pop group ABBA. In 2009, migrants accounted for 14.1% of the population – up from 9.1% in 1990. This is significantly more than Sweden’s neighbors Norway (10.0%) and Finland (4.2%), but less than European frontrunners Switzerland (23.2%) and Luxembourg (35.2%).
Sweden’s hospitality is national policy. Both parliament and
regeringskansliet, the government, pursue a migration policy that protects the right to asylum and facilitates freedom of movement across borders. “An attitude of openness is among our top priorities as well as a starting point in both Swedish trade and migration policy,” the Minister of Trade, Ewa Björling, told PROJECT M.
“Regarding specific skills, our population is too small to satisfy the labor demand of Swedish companies. We need more knowledge and more skills, as employers often experience difficulties in filling new positions, and immigrants become a crucial prerequisite for Sweden’s economic growth,” Björling explains.
The lack of workers will become more pressing as the Swedish population ages, albeit moderately. The country’s old-age dependency will rise from 28 (2010) to 42 (2050), the UN projects. Up until 2025, 1.6 million workers are expected to retire, of which 44% are public-sector employees.
Both Statistics Sweden and the Public Employment Service are expecting difficulties recruiting enough nurses, dentists and medical doctors. Despite a fertility rate of 1.9, slightly below the 2.1 mark needed to keep population size constant, Sweden’s population is expected to rise to 11.6 million by 2060, according to Sweden Statistics – largely thanks to immigration.
As workers support a growing number of retirees, Björling is concerned about the sustainability of Swedish welfare systems. “A key question is whether migration can be a remedy to the demographic challenge, and my answer is a clear ‘Yes.’ It is a key component in Sweden’s policies to achieve growth in the mid- to long term,” Björling explains.
A dental surgeon by training, Ewa Björling became minister for trade in 2007 after being a member of the Committee on Foreign Affairs from 2002 to 2007. Prior to her political appointments she was associate professor at Karolinska Institutet.
A far-reaching reform to immigration law in 2008, giving residency to everybody with a valid employment contract, only marginally increased the inflow of foreigners, by 15,000 people in 2010. “While the numbers are not extraordinary, these immigrants with their specific skill set stimulate Swedish society and foreign trade in particular,” Björling says.
For evidence, she points to a study published in
Ekonomisk Debatt (2009) showing that an increase in the number of people born abroad by some 12,000 individuals would lead to an increase in exports by as much as 7 billion Swedish kronor ($1 billion).
Foreign-born people are uniquely qualified to stimulate trade between their present country of residence and their country of origin Andreas Hatzigeorgiou
“Foreign-born people are uniquely qualified to stimulate trade between their present country of residence and their country of origin,” writes Andreas Hatzigeorgiou, political adviser to Björling, in the
Journal of Economic Integration (2010). Based on trade and migration data for Sweden and 180 foreign countries between 2002 and 2007, Hatzigeorgiou points to a statistically strong, positive and robust link between migration and increased trade flows.
Consequently, immigration can be used as an instrument for increased foreign trade, Hatzigeorgiou argues. However, the argument does not ring true with the general population. Public sentiment turned noticeably hostile towards newcomers in the 2010 elections, when anti-immigrant party Sweden Democrats gained enough votes to enter the national parliament. A recent Harris Poll, discussed in the
Financial Times Weekend on 19 October 2013, expects a “popular backlash against integration” in elections in Europe next year. Increasing numbers of UK, German and French citizens support “national restrictions on EU migrants’ rights to benefits,” the FT reported.
Immigration’s exact economic value is also debated among academics and experts. While the destination country may benefit, the country of origin may suffer a loss it can ill afford. Then too, the relatively small immigration flow into the destination country is usually nowhere near enough to replace the aging workforce. In industrialized countries, immigration would have to be increased substantially to achieve this.
At home in Sweden: young Zlatan Ibrahimović in 2000. © Laif
According to estimates, countries like Denmark or the United Kingdom “may have to double immigration rates to offset the impact of demographic change,” George Magnus writes in
The Age of Aging (2009). “The realpolitik outlook for Western economies, of admitting significantly larger numbers of migrants in the foreseeable future, is poor.”
Professor of economics Jan Ekberg (Linneaus University) calculated immigrants’ contribution to the Swedish welfare system and found their impact negligible.
“The positive net contribution to the public sector from the additional population is rather small even with good integration in the labor market,” he wrote in the peer reviewed
European Journal of Population (2011). Ekberg points to the fact that not only public revenues, but also expenses rise with a growing population. “The yearly positive/negative net contribution effect is less than 1% of GDP for most of the years.”
In 2009, Ekberg presented his findings to the Ministry of Finance and two years later to parliament, but saw them ignored by parts of the political caste. “There may be reasons for immigration, for example humanitarian, but the economic reasons are not very strong,” Ekberg told PROJECT M. “To ease the financial burden of welfare systems, we would be better to increase the employment rates among immigrants already in the country.”
There is plenty of room to follow Ekberg’s recommendation. While 80% of the working age Swedes are employed, only 65% of the foreign born are, he says.