Urban Facts

Under the heading Urban Facts, we present graphs and statistics from our research studies.

New construction benefits all income groups

In the graph, the population has been divided into two groups – the 50 percent who earn above the national median income, and the 50 percent who earn below. The graph shows the share of in-moving residents belonging to these two groups in different parts of the moving chain that follows a new construction. The study is based on Swedish new production during the years 1990-2017. "0" marks the move to a newly produced dwelling and the next moving rounds (1-5) consist of moves to a dwelling that has become vacant as a result of the first move.

Newly produced homes are often expensive and it is also largely people with higher incomes who move into them. But how are different income groups affected by new production? Can newly built housing create moving chains that free up housing even for people with lower incomes? The answer is yes, according to a study carried out by Che-Yuan Liang, researcher in Economics at IBF, together with Gabriella Kindström, PhD in Economics.

The study is based on register data from the years 1990-2017. The researchers divided the population into different groups according to income level and found that 60 percent of the newly produced housing was populated by people belonging to the wealthier half of the population. The results show, however, that the moving chain that follows from a household moving into a newly produced home turns quite soon. In the moving rounds that follow, it is people with an income level that is lower than the national median income that accounts for a majority of the moves. This leads Che-Yuan Liang and Gabriella Kindström to conclude that new housing leads to strong moving chains that also benefit low-income groups.

– Our results show that the benefit of new housing is evenly distributed between residents from different income groups. Although it is primarily people with high incomes who gain access to new housing, these homes create a ripple effect and indirectly improve housing options for people with low incomes. One of the explanations is that people with lower incomes move more often than people with higher incomes, which means that they more often participate in moving chains and take advantage of vacancies created by new housing, says Che-Yuan Liang.

Strategic building necessary to achieve a social mix

The diagram shows the distribution of tenancy forms in new housing (construction year 1995–2017) and older housing (before 1995). The residential areas are divided into groups based on the income level of each area. To the left: residential areas with low incomes. In the middle: residential areas with average incomes. To the right: residential areas with high incomes. Dashed bars show older housing stock, and full-coloured bars show the newly built housing stock.

To counteract segregation, a strategy from the municipal level has been to create more socially-mixed housing areas by varying the types of leases in new production. This may consist of mixing rental and tenant-owned cooperatives (co-ops; bostadsrätt) in newly built neighbourhoods. In the study Housing production, tenure mix and social mix, researchers Martin Söderhäll and Andreas Alm Fjellborg examine the mixture of various types of tenancies in residential areas with different socio-economic status and the extent to which new housing construction contribute to more mix.

The diagram shows that a high proportion of rental apartments are being built in residential areas with low incomes (the blue and purple bars to the left). The construction of public rental apartments has decreased sharply in these areas, although they still account for about 25 per cent of the total new production in those areas. The proportion of tenancies with private owners has increased slightly and accounts for 34 per cent of the new production.

The proportion of co-ops is increasing everywhere. In affluent housing areas (far right), co-ops make up about 48 per cent of the new production, while 33 per cent comprise single-family houses. The proportion of municipality-owned public housing (“Allmännyttan”) in these areas has increased slightly but is still low.

In residential areas with average incomes, the distribution of various types of tenancy in new production is very similar to the old housing stock, with the difference that the proportion of rental apartments has decreased somewhat in favour of co-ops.

In the study, the researchers also compared income differences between living in new and older homes.

In residential areas with low incomes, the average incomes for residents in new construction were higher than for those who already lived in the area, regardless of the type of lease. The income differences in these areas were greater in co-ops than in rental apartments.

In affluent areas, where the old housing stock mainly consisted of villas and single-family homes, the situation was the opposite. Those who moved into newly built rental apartments in these areas had significantly lower incomes than the existing residents. The same applied, to some extent, to co-ops.

The researchers also note that in terms of volume, the vast majority of new construction takes place in residential areas with average incomes. The conclusion is therefore that the way the municipalities have planned and built during the years 1995–2017, to some extent, has led to an increased mixture of different types of leases. On the other hand, construction has not contributed to an increased social mix in the residential areas to any great extent, because most new production takes place in areas with average incomes.

– In order to achieve a higher degree of social mix, the municipalities should facilitate the construction of rental apartments in more well-to-do areas and co-ops in residential areas with lower incomes. The greatest effect, i.e. the most social mix, would be achieved if rental apartments are built more strategically in the most well-off areas and in housing areas with the lowest incomes, says Andreas Alm Fjellborg, postdoctoral fellow in cultural geography at the Institute for Housing and Urban Research (IBF).

About the study

Title: Housing production, tenure mix and social mix
Researchers: Martin Söderhäll and Andreas Alm Fjellborg

Link to study

The American Dream – Swedish reality around the last turn of the century

The map shows the rate of social mobility in Sweden's municipalities in 1910. The map is based
on data for more than 200,000 father-son pairs and shows intergenerational professional
mobility of sons born in the late 19th century who reached adulthood in the early 20th century.

At the beginning of the 20th century, Sweden was one of Europe's fastest growing economies. During the period, Sweden also had a high level of social mobility compared to other European countries - the pattern is almost reminiscent of what was found in the very mobile United States in the 19th century. Economic growth and internal migration were important driving forces behind the difference between European countries, as well as between different areas in Sweden.

The new study shows that Sweden had high levels of social mobility even before the outbreak of the First World War, and several decades before the emergence of the modern welfare state. In addition, it shows that the differences in social mobility between the Old and New Worlds might not have been as great as many might think. But it also challenges the hypothesis of why the welfare state gained such a weak position in the United States; that a strong welfare state was not needed in the "land of opportunity". The fact that Sweden, despite its high social mobility, nevertheless saw the emergence of the modern welfare state, contributes to questioning whether this hypothesis is true.

Working paper

Title: Intergenerational Mobility in Sweden Before the Welfare State
Researchers: Thor Berger, Per Engzell, Björn Eriksson och Jakob Molinder

Read the working paper (PDF)

The working paper is also available at The Centre for Economic Policy Research (CEPR) (Behind pay wall)

Politicians have more high-income neighbours

The graph shows that elected municipal politicians have a higher proportion of high-income earners among their neighbours in relation to the general population. High-income earners are those who have income in the upper income quartile. The result for all politicians' neighbours is marked in grey, for centre-right bloc politicians' neighbours in blue and for left bloc politicians' neighbours in red. Among the 50 closest neighbours, the average politician thus has 8.5% more high-income earners than the average non-politician has. The study includes politicians who were elected during the elections in 2002, 2006 and 2010.

A new study shows that elected municipal politicians live in areas where the neighbours have higher incomes than what is the case for the general population. The narrower the area around each individual is defined, the stronger this pattern becomes. Similar patterns exist for the neighbours’ level of education and their country of birth. Politicians from the traditional centre-right bloc have more high-income individuals, highly educated individuals, and individuals born within the OECD (including Sweden) among their closest neighbours than what politicians in the left bloc have.

The study also examines whether political decisions are influenced by where politicians live. During the election periods examined, fewer building permits were approved for multi-family houses and fewer proposals for school closures were made in neighbourhoods, where more politicians from parties in the governing majority lived. The conclusion is that politicians who have the possibility to affect the political decisions avoid making bad decisions for their own residential area according to the "not in my backyard” principle.

About the study

Title: Politicians’ neighbourhoods: Where do they live and does it matter?
Researchers: Olle Folke, Linna Martén, Johanna Rickne and Matz Dahlberg

To the study

Last modified: 2023-05-05