Regional policy often rests on the premise that lack of jobs is a main constraint for development of lagging regions. Drawing on register data for the complete system of Swedish functional labour market regions over 1990–2024, we show that employment rates have converged sharply such that the domestic local labour reserve is largely mobilised, while human capital has diverged. Urbanisation continues but is nowadays primarily driven by demographic composition rather than net migration. We also document that employment appears to be reversible whereas population decline is much harder to combat. One result of this is that in many regions, job creation and local fiscal capacity has been decoupled. Our main conclusion is that the main binding constraint on regional development has shifted from jobs to workers. We discuss policy implications.