We got better in 2021, and some more than others. Income inequality rose sharply. But the main reason is that Swedes sold a lot of shares and houses at a profit then, according to researcher Daniel Waldenström.

Some get to hold the money harder. Archive image.
Some have to hold on tighter to their money. Archive image.

The economic standard increased on average more in 2021 than in a number of years. It also made Income inequality, and it is now the largest since at least 1975, according to Statistics Sweden (SCB).

The so-called Gini coefficient measuring income inequality increased to 0.333, which is the highest level since the measurements started in 1975.

One-off profits

Daniel Waldenström, Professor of Economics and Research at the Institute for Enterprise Research, has been studying economic inequality. He explains that the main reason for the increased differences in 2021 is that people sold a lot of assets at the time. This applies to both stocks and homes that were sold with large capital gains, he says.

"It's one-off income, it's the most important explanation", he says.

He does not see this as a sign that inequality is increasing.

"No, it's a manifestation of differences that already existed. Then, if you take a bigger sweep, the inequality in Sweden has not increased very much in ten or fifteen years."

Despite high immigration and unemployment, inequality has not increased during that time, he explains. However, if you look further back, such as to the 1980s, increased inequality is more noticeable.

"But it was an extreme situation then, with high unemployment and low economic growth and poor economy."

Political rhetoric

Politically speaking, the differences are often said to increase, but that is not true, according to his research.

"There is a lot of political rhetoric about this, but we forget that Sweden is one of the world's most equal countries", says Daniel Waldenström.

According to the SCB, the share of households with low economic standards also increased slightly between 2020 and 2021, from 14.3 to 14.7 percent. Low economic standards mean an income lower than 60 percent of the median population.

Mikael Damberg (S) was Minister of Finance in 2021. He notes that SCB's figures reflect the reality in 2021, when both shares and properties rose sharply.

Reducing income inequality this year

People were also better off as the economy grew. But the increase in income inequality was not due to any policy decisions. Now this year, with lower stock prices and falling housing prices and will look different, he says. Probably the income inequality will not increase this year, rather the opposite, he believes.

He sees the need for support for the most vulnerable, and crisis policy must be directed at them, although income inequality is unlikely to increase this year.

"On paper it will look like a successful year for equality, but at the same time we get reports that school children eat more of school food and that families seek help from relief organizations", says Mikael Damberg.