A study of job polarization in Sweden from an urban-rural perspective

Abstract This study is an explorative examination of changes in employment, revenue, and firm structure for low, mid, and high-skill firms in urban and rural areas in Sweden from 2007 to 2019, using skill groups based on education levels. For employment in Sweden in general, we find evidence of job upgrading. In the city of Stockholm we also document job polarization in the sense that employment in both low-skill and high-skill industries increased. We discuss various reasons why job polarization might be an urban phenomenon. We also document some consolidation towards larger firms in the low-skill sector and note that the revenue share of high-skill industries was constant during the period. Even though Swedish labour market institutions differ substantially from those of other OECD countries, the patterns of job polarization are strikingly similar.