"For more than 50 years, required schooling has been nine years long. Today, that sort of education is far from sufficient," Löfven and Social Democrat education policy spokesman Ibrahim Baylan argue in an opinion piece in the Dagens Nyheter (DN) newspaper.
Today, completing secondary education (gymnasiet) is a precondition for young people to compete in the labour market, they write.
However, the current centre-right Alliance government of Fredrik Reinfeldt has consistently forgone investments in education and made large cuts to Sweden's secondary education system, Löfven and Baylan claim.
In 2012, 675 million kronor ($106 million) in secondary education spending was cut, with a further 1.36 billion kronor planned in 2014.
"For the first time in our history, Sweden has a government that is lowering ambitions for the education of the next generation," they write.
Making secondary school mandatory is an "ambitious but realistic" step, they argue, adding that any final proposal would include exceptions to the requirement for students with good reason to leave school early.
The Social Democrats also want to see more pathways for students to complete a secondary school degree, including allowing students to combine practical work experience with their studies.
In addition, vocational training programmes ought to be revised to ensure they better align with their respective industry sectors.
"This reform is going to require resources. But the costs of letting young people end up outside the labour force are significantly higher," write Löfven and Baylan.
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The new school requirement proposal will be presented at the Social Democrats' party congress in April.