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GENDER EQUALITY

Stockholm’s women are more highly educated than men – but paid less: study

Women in Stockholm have on average a higher level of education than men in the capital, but typically receive lower salaries, according to a large-scale study carried out by the county administrative board.

Stockholm's women are more highly educated than men – but paid less: study
Women in Sweden's capital typically earn much less than men, even if they have a higher level of education. Photo: Christopher Hunt/imagebank.sweden.se

The median annual income for women included in the study, which looked at over 16,000 Stockholmers born in 1985, was 248,000 kronor ($26,600), compared to the figure of 341,000 for men. 

That was despite the fact that 41 percent of the women had undergone at least three years of tertiary education, while the figure for men was just 27 percent. 

“It's a problem in and of itself that men are lagging behind women in education. But regarding income, when women start to work, they don't receive any benefit from [having more education]. Women with upper secondary level education earn less than men without it, that's disheartening,” Per Bark, head of analysis at the county administrative board behind the study, told Dagens Nyheter, which was first to report on the results.

Bark said he was “quite surprised” at the size of the discrepancy.

The study was carried out between 2000 and 2016, and by the end of that period, 16,200 of the original 19,300 participants still lived in the Swedish capital.

Of those, women in the group earned an average of 90,000 kronor less each year than the men, even when other factors such as socio-economic background, sickness and other kinds of leave, and education were taken into account.

READ ALSO: Swedes hold strongest views on gender equality in EU: study

Women without upper secondary education typically earned the lowest salaries, with a median annual income of 109,000 kronor, while men without upper secondary education earned 271,000 kronor.

This was not only more than double the income of women with equivalent education, but also more than women with at least three years of tertiary education.

Gender wasn't the only factor that seemed linked to stark income differences. The study also looked at the difference between Stockholmers born in Sweden or abroad, which neighbourhood they lived in, whether they had disabilities, and education level. Stockholmers who were born overseas, had foreign-born parents, or came from a socio-economically disadvantaged background, were less likely to have upper secondary education, which was linked to earning a lower salary at the age of 31.

However, parental level of education seemed to be a more important factor than whether someone was born in Sweden or abroad, when it came to predicting whether they would complete upper secondary education.

Bark suggested that investments in education could be a way of evening out these inequalities. “If we can succeed with education and entry to the job market, that means big achievements over time,” the analyst said.

READ ALSO: Reader voices: What's it REALLY like working in Sweden?

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MONEY

Three ways Sweden’s slashed interest rate will boost your finances

Sweden's central bank, the Riksbank, in May lowered the policy rate for the first time in eight years. How could this affect the finances of those of us living in Sweden?

Three ways Sweden's slashed interest rate will boost your finances

Lower mortgage rates

The policy rate is not the same as the interest rate on your mortgage, although they are linked. In a policy rate prognosis from March, the bank predicted that the policy rate could drop to as low as 2.75 percent by the end of 2025, a drop of 1.25 percentage points since the beginning of 2024.

If mortgage rates drop by the same amount, you could expect a drop in the monthly cost of a 3 million kronor mortgage of around 3,000 kronor a month, not including the tax rebate for interest costs.

Higher property prices

As mortgage rates get lower, the housing market is likely to improve, as buyers know their monthly costs aren’t going to skyrocket due to ever-rising interest rates.

If you already own a home and you’re planning on buying and selling at the same time in the market, this will affect you less, as the price of your new home will most likely go up at the same rate as the price of your old home, but this is good news for anyone planning on selling.

It’s worse news for first-time buyers, who will have to save a larger deposit as prices go up, but on the other hand they’ll get lower mortgage rates and a more stable policy rate makes it easier to plan ahead for the future without being surprised by ever-increasing rates.

A stronger Swedish economy

The Riksbank’s decision to lower the interest rate is proof that the bank believes inflation is over – for now at least. This means that we can expect to see inflation remain at a more stable level, and we’re unlikely to see anything close to the ten percent inflation we saw at the end of 2022.

Lower inflation means that Swedish monetary policy won’t need to be as cautious or restrictive in the future, as the government and the central bank no longer need to put all their efforts into fighting inflation.

That’s not to say that authorities will start stimulating the economy just yet – they’re likely to proceed with caution to make sure inflation really is down for the long-term – but Thursday’s interest rate announcement indicates that the “economic winter” Finance Minister Elisabeth Svantesson warned of in September last year could be drawing to a close.

Is it all good news?

In the short term, the value of the krona is likely to worsen somewhat, as the central bank has lowered Sweden’s interest rate ahead of other major central banks. The krona weakened slightly after the bank’s announcement on Thursday, dropping 8 öre in value against the dollar and 7 öre against the euro.

This is good news for people with income in other currencies, but bad news for those of us who are paid in kronor.

Having said that, a stronger Swedish economy is good news for the value of the krona in the long term, although it’s difficult to predict when the krona will start to gain in value and by how much.

At the end of last year, Riksbank governor Erik Thedéen described the krona as “undervalued”, and underlined the importance of having strong foundations in the Swedish economy.

“The Swedish economy is, at its foundations, well-managed, and sooner or later this will lead to a stronger exchange rate,” he said. “Sweden has strong finances, a well-educated labour force, responsible salaries and a good underlying level of competition.”

“As anyone who has tried to predict the exchange rate knows, it’s genuinely difficult to say exactly when it will go up and by how much, but it can also happen quickly when the trend is broken and the krona starts to gain in value.”

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