october 2003. productivity growth can help when the long - term growth rate receives little or no contribution from the labour supply, dependency on labour productivity increases. compared with other countries, sweden has thus far performed well in terms of productivity growth. during the 1990s productivity has risen by 2 per cent per year or slightly more. this is a clear improvement on the 1980s when productivity growth was around 1 per cent per year, and even more so compared with the 1970s when the trend was actually negative. so it is productivity rather than the labour supply that has fuelled growth in recent years. this also applies to the other nordic countries, al - though the labour supply has made a bigger contribution than in sweden. the particularly steep rise in labour productivity during the 1990s was due to several factors. one important factor was that many low - productivity firms went bankrupt in connection with the sharp economic slowdown at the beginning of the 1990s, while other firms implemented cutbacks of lowskilled labour that had less qualified tasks. when the economy began to grow again there was plenty of unemployed labour, and it was possible to attain high growth without inflation gathering pace. another cause was the it boom towards the end of the 1990s, which also contributed to productivity growth. in the years ahead, we can also expect to have good productivity growth in sweden. increases in productivity growth can be a solution for large parts of the corporate sector, but this is less often the case for parts of the public sector. quality care and education often require a strong presence of human labour. nevertheless, there is probably much to be gained by organising and financing the public sector in new ways. the contribution made by trade union organisations in this regard could prove to be a decisive success factor. here, the nordic countries have an advantage over others through a high degree of organisation and an established cooperation between employers and employees. the education sector also faces considerable challenges. when the current generation of teachers in sweden retire, a substantial increase in new teachers will be needed. according to the national labour market board, the number of new recruitments required to replace retired teachers is forecast to come to around 100, 000 up to and including 2015. this is 40 per cent of the number currently employed. recruitment difficulties are forecast to begin within certain teacher categories as early as 2006. this means that measures must be taken immediately to ensure a satisfactory supply of staff in the future. investing in education is different to investing in care. education is unique in the sense that it can be an investment to

proportion of the population, those between 20 and 64 years, will decline from 59 per cent in 2002 to 54 per cent in 2050. so, from having experienced a rise of almost one million people between 1950 and 2000, this group will increase by half as much, or by half a million people, over the next 50 years. this trend means, according to statistics sweden's forecasts, that the economically active population in sweden will have to support an increasingly large percentage of the young and old. today, each person of working age supports 0. 7 people that do not work. by 2050, it is forecast that each worker will have to support 0. 84 people. if we only look at the elderly, there are 0. 29 people that are 65 years or older for every worker. by 2050 this ratio is forecast to have risen to 0. 42. these developments will entail ever increasing demands on higher labour force participation among the elderly. according to a study by statistics sweden, the percentage of sweden's retirement pensioners that have to work to support themselves is forecast to rise by 50 per cent by 2035. one part solution to the problem comes from the immigrant population. it is people with a foreign background that are forecast to account for the net contribution to the economically active population. by 2015 it is forecast that approximately every fifth person in sweden between 20 and 64 years will have been born outside sweden or have foreign - born parents. meanwhile, the number of swedes with swedish - born parents will be fewer in 2015 than in 2000. people with a foreign background in sweden have found it difficult to get a foot - hold in the labour market. employment among people with a foreign background is around 30 per cent lower on average than among native swedes. were the employment rate for this group to be as high as the average for sweden's population, employment would rise by 96, 000 people. finally, the decisive factor for the labour supply is how many hours we work. the number of hours worked has fallen recently for several reasons : overtime has declined, part - time work has increased and absence to care for own children has also risen. but the single biggest reason and consequently the most serious problem in sweden is sick leave. both the number and length of absences due to sickness have risen sharply in recent years, thus entailing a reduction in working hours per employee. three years ago the number of hours worked increased by 2. 7 per cent. last year