Exploratory Analysis on Sweden's Coronavirus Strategy: How Successful Has the Swedish Approach Been So Far?

Many on the Left, particularly Senator Bernie Sanders, laud countries such as Sweden because the "Nordic model." Forget for a moment that Sweden abandoned actual socialism in the 1990s because it had failed, that Sweden economic freedom comparable to the United States, or that Sweden has some features that are undesirable to the self-identified "democratic socialists," whether that be school choice, abolishment of the wealth tax, or the fact that Sweden deregulated significant portions of its economy in the late 1990s and early 2000s. In spite of these counterfactuals, it had been common for the Left to idolize Sweden.....at least until the pandemic began.

Once we were in full lockdown mode, Sweden received considerable derision. Why? Because Sweden did not implement a lockdown. On top of that, there was no face mask mandate. Granted, they closed down secondary and tertiary schools and gatherings exceeding fifty people, but a lot of businesses and institutions remained open while multiple countries implemented lockdowns and stay-at-home orders. Sweden largely relied on voluntary social distancing. I can understand why lockdown proponents would throw shade at Sweden. Imagine if a country proved that the goals of the lockdown could have been achieved without a lockdown. It would mean that so many of us went through lockdowns for nothing. Those who get angry at Sweden for their approach to handling COVID-19 do so because they have skin in the game. They want to know that their sacrifice was worthwhile. But enough of psycho-analyzing (at least for now). Let's answer an important question here: how successful has the Swedish model been so far?

One way to answer this question is to look at the death rates. If keeping things open like Sweden were as bad as lockdown proponents purported, Sweden would be an unfortunate outlier. However, that is not the case. Looking at John Hopkins' Coronavirus Resource Center, Sweden has a death rate of 57.05 per 100,000 people. This is certainly a higher rate than multiple countries, including its Nordic neighbors: Denmark (10.73), Finland (6.05), and Norway (4.97). On the other hand, Sweden has fared better than four European nations that locked down: Belgium (87.48), the United Kingdom (62.44), Spain (61.72), and Italy (58.64). France was not so far behind, with 45.56. Another noteworthy example is when you compare the state of New York to Sweden. Andrew Cuomo touted his work on defeating COVID-19 at the Democratic National Convention last week, although the death rate for New York is almost three times that of Sweden, at 169 per 100,000 people (Kaiser Family Foundation).

Let's take a look the raw number of COVID deaths. One Swedish model, which was inspired by the Imperial College model that got the United Kingdom to go into lockdown mode, predicted back in April that if they did not "change their evil ways" by implementing stringent social distancing measures, there would be 96,000 deaths (Gardner et al., 2020). Where are we with that?  If you look at statistics at Folkhälsomyndigheten (FOHM), which is Sweden's health ministry, the deaths are slightly over 5,800. When looking at the FOHM death data by age, you have some interesting findings:

1. Nearly 4,000 of the deaths of those who are 80 and older. About half of Sweden's COVID deaths in Sweden during its peak were in nursing homes. If I were to have any criticism about the execution of Sweden's strategy, it was the inadequate protocol at long-term care facilities at the onset of the pandemic (Stern and Klein, 2020). 
• Although elderly deaths were high in Sweden, it still was nothing in comparison when New York governor Andrew Cuomo mandated that COVID patients stay in nursing homes, thereby significantly contributing to New York's COVID deaths.
2. As we see below, COVID deaths in Sweden peaked in April, but in recent weeks, COVID deaths have come to a grinding halt (Worldometer). 
3. One study from Sweden shows that those in nursing homes in Stockholm had an average about 5 to 9 months of life remaining (Stern and Klein, 2020). While we should not minimize anyone's death, looking at it from the angle of years of life lost (YLL) due to premature mortality also should play a role in assessing Sweden's success. For example, someone who dies from COVID at age 30 would have more years of life lost to COVID than someone who is in their twilight years. About 500 of Sweden's COVID deaths come from those who are 50 and younger. This is significant because setting the initial nursing home policy aside, you see there are not that many deaths for most age demographics. 

The other scary COVID model that came from Sweden had to do with hospital capacity. This model predicted that intensive care unit [ICU] would reach 10,000 beds, well above the pre-pandemic capacity of 526 beds (Sjödin et al., 2020). Sweden was quickly able to ramp up its capacity to 1,100 ICU beds, but if we took the model seriously, Sweden would be screwed in either case. Guess what happened? Did Sweden exceed hospital capacity? Svenska Intensivvårdregistret (SIR), which is Sweden's intensive care registry, has data on COVID ICU bed usage. There was a two-day peak of 558 ICU beds in April, but it has declined considerably ever since (see SIR data below). Not only did the model exaggerate by almost twenty-fold, but Sweden still had plenty of ICU capacity left. In other words, Sweden was able to accomplish one of the lockdown's main goals without locking down, i.e., making sure that hospitals did not exceed capacity.

I would like to say a word about herd immunity. When the pandemic began, experts postulated that herd immunity would be around 60 to 70 percent. In May, an antibody study showed that Sweden only reached about 7 percent (see here), which is a far cry from 60 percent. By late July we started to see a decline in cases, hospitalization, and deaths. If it is not the antibodies, what could it be? It could be possible that T-cell immunity is contributing to herd immunity, as is implied by studies from Karolinska University in Sweden (Sekine et al., 2020) and University Hospital Tübingen in Germany (Nelde et al., 2020). Even better is that herd immunity might not be so high. One study from Science magazine calculates a possible herd immunity rate of 35 percent (Britton et al., 2020), whereas a preprint study from Oxford suggests that it could be as low as 10 to 20 percent (Aguas et al., 2020). While this evidence is preliminary, it does suggest that Sweden could be closer to herd immunity than we might realize. If Sweden did inadvertently reach herd immunity sooner than expected, it could mean that Sweden has experienced the bulk of its COVID deaths as a result. And if that is true and other countries end up going through a second wave, it means that it is too early for lockdown proponents to use death rates as a metric.

While this a pandemic, there is more to consider than the health aspect. There has also been the question of whether keeping the economy open would help Sweden. If you would have asked me at the beginning, I would have expected the Swedish economy to get pummeled along with the rest of the world. After all, Sweden is more dependent on imports, not to mention greater dependence on international demand for Swedish goods. Not even the Riksbank, which is the Swedish central bank, was that optimistic. They were predicting an annualized contraction of 6.9 percent. Yet the GDP for the first half of 2020 surprised me. Although economists were predicting a 0.6 percent contraction for Sweden in Q1, it actually grew at 0.1 percent (or an annualized rate of 0.4 percent).

Sweden did experience a contraction in Q2, but it was not nearly as bad as their European neighbors (BBC). Sweden had a quarterly decline of 8.6 percent, which was still less than half of the United Kingdom (19.1 percent) and Spain (18.5 percent). As a reminder, the United Kingdom and Spain locked down, yet they both had higher death rates and a higher economic contraction than Sweden. The European Union average was a contraction of 11.9 percent, which is also worse than that Sweden. Capital Economics found that Sweden is going to have the least shallow recession in Europe, even in comparison to its Nordic neighbors.

Since the Swedish economy did not experience economic contraction in Q1, they technically are not in a recession yet. That could change in Q3, but as of now, economic growth is faring better than other developed countries.

Unemployment figures are less encouraging. Sweden has an unemployment rate of 8.9 percent (Statistika centralbyrån [SCB]), whereas the Euro Zone average is 7.8 percent (Eurostat). While it is still higher than the Euro Zone average, it is still lower than the U.S. unemployment rate of 10.2 percent.

Postscript: Yes, the Swedish government made some clear mistakes at the beginning, most notably with long-term care facilities. But even after that rough start, Sweden seems to have gotten the virus under control. The decline in deaths, hospitalizations, and cases since its April peak has been encouraging. The GDP figures are also higher than forecasted, which is also good news. Sweden's economy seems to be faring better than its European peers.

While there is some reason for initial optimism, it is still too soon to definitely determine if Sweden's light-touch method was the correct one. Whether Sweden gets hit with a second wave will help determine if its more lax, voluntary approach was the right one. If Sweden does not get a second wave, I would most likely give Sweden a rating of B/B+ for its overall response. For Sweden's sake, I hope that it does not get a second wave.