Regional differences in productivity in Sweden: Insights from OECD regions
Regional inequality has increased in Sweden over the past decades, albeit from a low
level. While redistribution and other public policies can narrow regional gaps in
income, well-being and access to services, productivity growth is key to maintaining
economic dynamism, creating job opportunities and attracting and retaining skilled
workers. Against this background, this paper documents the performance of Swedish
large regions (TL2) on the main productivity drivers identified by the literature.
Panel regressions on a dataset covering up to 125 OECD regions in 17 countries identify
the factors associated with high regional productivity, namely rail and road connectivity,
knowledge-intensive employment and research and education. Investment in construction
and finance is linked to somewhat weaker productivity. Even after taking these factors
into account, the Stockholm region benefits from a sizeable productivity advantage,
which likely reflects agglomeration effects.
Published on November 19, 2021
In series:OECD Economics Department Working Papersview more titles