These are the conclusions of a new report from the Swedish Confederation for Professional Employees (TCO) published on Thursday.
With all OECD countries crying out for qualified labour to meet future demand and to sustain tax revenues as the workforce ages, TCO questions whether a more flexible immigration policy is the only solution to the problem.
The report recommends tough action to tackle labour market discrimination and argues that unions have a role to play in supporting foreign-born graduates to exploit networks and find employment corresponding to their qualifications.
Where are you from and when did you arrive?
The study was performed by integration researcher Lena Schröder based on Statistics Sweden (SCB) data compiled on all those graduating from a Swedish university in 2003 and their employment situation in 2006.
Schröder has used the data to examine the conditions faced by university graduates born outside of Sweden by year of immigration and country of birth. The report also considers fields of study and how graduates go about finding work.
The report shows that foreign-born university graduates have up to twice as high a risk as their Swedish-born counterparts to earn a monthly salary under 20,000 kronor ($2,275), even if they are the same age and live in the same place in Sweden.
In comparison with those born in Sweden, foreign-born graduates were however more likely to pursue higher education within the fields of healthcare, technology and the natural sciences – areas that would typically increase their chance of finding employment – and therefore salaries – equating to their qualifications in Sweden.
The statistics also show that those born in the other Nordic countries, EU25, USA, Canada, Switzerland, Australia and New Zealand actually have a slightly lower risk of unemployment than even their Sweden-born counterparts.
Irishman Jonnie Rice, who graduated from Gothenburg's prestigious Chalmers University in 2007, explained to The Local however that despite the statistics the reality is not always as it should be.
"When I tried to use my networks and also applied for jobs through the traditional routes in Sweden, my applications were declined and I was usually asked 'why should we hire a non-Swedish graduate over a fluent Swedish/English speaking Swedish graduate?'"
Rice told The Local that while he enjoyed his stay in Sweden and would like to return one day, his experience in the labour market is a significant road block.
"I think Swedes are shocked when they get accused of discriminating against foreigners, because they see themselves as a very diverse and accepting nation," he said.
For those born in eastern Europe, Africa, Asia or Latin America the picture is very different, with a risk of unemployment almost four times that of a Sweden-born counterpart.
Schröder concludes that since many of the graduates selected for the study completed both their primary, secondary and higher education in Sweden, language deficiencies alone do not explain the difference.
The report does however show that education pays, for all. But a Swedish university education pays less for those born in eastern Europe, Africa, Asia and Latin America and especially for those arriving in Sweden after age of seven (when primary education begins).
So you are in work but what do you do?
Despite the obstacles, many do find employment in Sweden after graduation and actually find themselves over qualified for the jobs they are doing.
Between 80 and 90 percent of employed graduates born in Sweden, other Nordic countries, the EU25, USA, Canada, Switzerland, Australia and New Zealand were in work in 2006 which required a university education.
Among those born in other parts of the world this figure declined to 65 to 75 percent. No significant differences were noted between women and men.
The problem is worst for those born in Africa, Asia and Latin America.
How does Sweden compare internationally?
The report also looks at how Sweden compares internationally. Schröder has studied a 2006 OECD report over the situation of foreign-born graduates in employment markets in a series of comparable countries.
None of the countries studied showed equal levels of employment between those born in the respective country and those born outside.
The difference in Sweden amounted to 10 percent, with only Denmark, Greece, Finland and Germany showing a greater gap. Nevertheless, Sweden is fairly average when looking exclusively at levels of employment for foreign-born graduates.
But OECD report does not, Schröder points out, break down the statistics into country of origin.
All things being equal, difference remain
The TCO report concludes that place of birth and age on arrival in Sweden significantly affect the opportunities available to foreign-born graduates in the employment market.
Of key importance is whether the foreign-born graduate arrived in Sweden before or after the start of primary education. Although differences remain for those with countries of origin in eastern Europe, Africa, Asia and Latin America.
What can explain the differences?
The report outlines factors that could have some bearing on the situation such as Swedish language ability, methods of looking for employment, access to social networks and discrimination.
Schröder observes that the plausible explanations can be divided into two groups: "shortcoming among the foreign-born graduates" and "the attitudes and behaviour of those in the position to hire staff and thereby control advancement on the labour market."
Schröder concludes from the available research that a combination of discrimination in the employment market "even directed towards graduates", and "insufficient access to contact networks" are the most plausible explanations for the situation.
What can be done?
Schröder argues that unions have several alternatives available to them to address some of the challenges faced by foreign-born graduates in Sweden.
Labour market discrimination "could be compensated with a form of mentorship - where those in work assist those looking with regard to contacts and opportunities".
Another method could be to monitor the recruitment process and ensure that resumés bearing foreign sounding names are not placed at the bottom of the pile.
The Public Employment Agency (Arbetsförmedlingen) could also work harder to prioritize between job-seekers and training programs. It could also work as a mediator with employers "to overcome obstacles faced by foreign-born workers", Lena Schröder recommends.
She also underlines that the challenges faced by Sweden's labour market, taxation system and consequently high levels of welfare, demand action to ensure that Sweden is not only an attractive place for qualified foreign-born workers, but also to ensure that skills and qualifications receive their rightful reward in the workplace.