Disability employment initiatives: review of recent evidence from Denmark and Sweden
This review has been carried out in response to the aims of the Fair Work Action Plan and associated evidence plan. It looks to examine the evidence surrounding the promotion of disability employment in Active Labour Market Policies (ALMPs) in Denmark and Sweden.
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3. Findings from Sweden
3.1 Disabled people’s employment
Sweden is another country recognised for its policies around increasing disabled people’s employment, and for introducing a variety of targeted initiatives to promote the social inclusion of disabled people 28.
The most recent data available for Sweden shows that the employment rate for disabled people was 53.9% in 2020 7 and, the disability employment gap was 23.2 percentage points in 2023 6.
3.2 Characteristics of the employability support system
Research highlights that Sweden’s policies aimed at increasing disabled people’s employment are characterised by robust enforcement mechanisms, and a variety of targeted initiatives to promote the social inclusion of disabled people 28. The overarching policy goal is to achieve full participation in society, ensuring equitable living conditions for disabled people 29.
Unlike Denmark, which focuses on the flexibility of the employment system, Sweden emphasises the flexibility of individuals within the labour market 30. This approach aligns with Sweden’s societal expectations of participating in work as a moral responsibility, and with an employability system that develops programmes that combine learning and work to develop both generic and job-specific skills 30,31.
Some research has identified the need for reform of disability policies to better balance health and work, particularly for people with learning disabilities 30,31.
3.3 Key findings on the effectiveness of ALMPs
Review of the evidence on the effectiveness of Sweden’s ALMPs centred around the following themes:
- Overall effectiveness of ALMPs and impact on earnings;
- Utilisation of data;
- Characteristics and effectiveness of wage subsidies initiatives; and,
- Employers’ attitudes.
3.3.1 Overall effectiveness of ALMPs and impact on earnings
While ALMPs support disabled people, earning disparities persist. Evidence also shows that while ALMPs aim to support disabled people, there are significant and widening income gaps, especially following job loss 32. Initiatives tend to focus on securing initial jobs with less emphasis on sustaining jobs over the long term, meaning jobs may not provide lasting employment 18.
3.3.2 Utilisation of data
Sweden’s systematic data exchange has been effective in supporting evaluations and shaping better labour market policies for disabled people 15. The Institute for Evaluation of Labour Market and Education Policy produces and publishes substantial work using Swedish linked administrative data, as Sweden collects information on the employment status in separate registers (such as social assistance register), which can be linked to the main employment register 19. Researchers can also apply for access to these registers to conduct evaluations 19.
3.3.3 Characteristics and effectiveness of wage subsidies initiatives
The reviewed evidence on the effectiveness of wage subsidies, a central feature of Sweden’s initiatives to increase disabled people’s employment, indicated that this approach produces mixed results.
While these subsidies have successfully increased employment rates among disabled people in the short to medium term, they have also led to a ‘lock-in’ effect, where individuals remain in subsidised roles for extended periods without transitioning to unsubsidised employment 33,34,35. Employers view wage subsidies positively, while indicating that additional support is necessary to make these initiatives fully effective 37.
3.3.4 Employers’ attitudes
The reviewed evidence on employers’ perspectives on hiring disabled workers highlighted several perceived challenges from employers’ points of view, including uncertainties about reduced work capacity 18. Wage subsidies alone are insufficient to address these concerns 18.
Key success factors 18,37,38 include employers’ knowledge of impairments, trust, the need for structured work environments and job design, and prior positive hiring experience.