"How is it possible for average health status to improve while many workers continue to leave the labour market permanently due to health problems, forced to rely on welfare to survive? At the same time, many working-age adults with reduced work capacity are denied the opportunity to work. This social and economic tragedy is common to virtually all OECD countries, including Sweden. It is a paradox that warrants explaining as well as innovative action. This single-country report in the OECD series Sickness, Disability and Work explores some of the reasons behind this phenomena in Sweden and the potential of its innovative recent and ongoing reforms, for example with regard to sickness absence and benefit policy, to lower inactivity and increase participation. The report includes a range of recommendations to address evident and foreseeable gaps, with consideration to broader impacts from the global financial crises on the Swedish economy. Since 2006 when Sweden had the highest level of dependence on sickness and disability benefits in the OECD (14% of the working age population), significant reforms have taken place to address structural issues dating back to the mid-1990s when a shift from unemployment benefits occurred. The hitherto time-unlimited sickness benefit was capped to six months and those no longer eligible becoming expected to seek to continue work in an amended or different job, including in one with a different employer if necessary. This reform is particularly significant because it aims to address one of the key problems affecting many other countries: people holding on to the wrong jobs for too long. This report concludes that further change is needed to ensure that the reforms live up to their promise. Responsibilities and financial incentives for some of the key actors, particularly employers and the health care system, and co-operation among some institutional actors, all have to be strengthened."

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