Sweden can win from fewer births with smart policy, but government does the opposite

Sweden is grappling with historically low birth rates, a trend that poses significant challenges to its economy and social welfare systems. With only 1.42 children born per woman, the nation faces a demographic shift that could lead to a shrinking population and an increased burden on a smaller working-age group to support a growing elderly population.

However, the article suggests that this demographic change is not without potential upsides. Historian Fredrik Charpentier Ljungqvist notes that declining populations have historically correlated with increased prosperity and more affordable housing. This perspective suggests that rather than solely focusing on boosting birth rates through incentives, Sweden could strategically adapt its welfare and labor market policies to leverage these demographic shifts.

Potential benefits include reducing the size of preschool groups and easing pressure on the housing market, making accommodations more accessible. Furthermore, a potential shortage of workers could be addressed by attracting international talent, a strategy that the article argues the current government is actively undermining. Recent policy changes, such as more than doubling the salary requirement for work permits, have made it significantly harder for foreigners to gain employment in Sweden.

The piece criticizes the government's approach, suggesting that instead of desperately trying to increase births with financial incentives for families, the focus should be on adapting welfare systems. The author posits that Sweden can remain a prosperous nation by implementing smart reforms, potentially including a higher retirement age and increased employment in elder care. The article concludes by highlighting the missed opportunity in immigration policy, suggesting that people worldwide would readily move to Sweden for work if the barriers were lowered.