High unemployement, poor health, and low education afflict neighborhoods like Rinkeby in Stockholm, Rosengård in Malmö and Bergsjön in Gothenburg, where a high percentage of the populations were born outside of Sweden. Many of these neighborhoods were part of the "million program" which aimed to build new and affordable housing in the 1960s and 1970s . The project reflected the Socialist ideals of the time. But houses built for workers are now the homes of people who can't find work.
Sweden's integration minister Erik Ullenhag wants to boost these neighborhoods by turning them into free enterprise zones where busniesses would be given tax breaks to create new job opportunities for local residents.
"We are in a situation with high unemployment. We are in a situation where kids are growing up in areas where the normal situation for an adult is to not have a job to go to", says Ullenhag.
"We need more workplaces in these neighbourhoods. But this is not the only solution for tough neighbourhoods, it's a wider issue", he told Radio Sweden.
Unemployment among young people, which is reported to be at 25 percent in Sweden, is twice as high among those who were born outside of Sweden.
Anders Bergh, an economist at Lund University, says that instead of focusing on why people need to leave the troubled neighborhoods to find work, politicians should ask why these people struggle to find a job in the first place.
"This proposal does not attack the main problem. The people who live here have trouble finding a job anywhere, not neccessarily just close to where they live", he says.
Bergh has edited a new anthology put together by liberal thinktank FORES, which investigates the proposal of new free tax zones, and looks into alternative approaches. Bergh says that while tax reforms would help those in need of a job, they aren't enough to tackle the larger structural inequalities in Sweden.
"It's the right strategy to lower taxes on labour, but you need to do that everywhere, not just some geographical areas."
"You'd need to improve schools in these areas, and you'd need to fight racism on the job market as well", says Bergh.