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Unformatted text preview: The Ups and Downs of the Swedish Welfare State: General Trends, Benefits and Caregiving Helen Lachs Ginsburg and Marguerite G. Rosenthal [Note: This is a corrected version of the footnoted article that was earlier posted on the web.] ONCE ONE OF EUROPE'S poorest countries, in the post World War II decades Sweden evolved into a slum-free, affluent, egalitarian full employment welfare state, with a strong commitment to work for all and women's equality -- the poster child of advanced welfare states. Income differences narrowed dramatically and poverty was nearly eliminated. Labor-management cooperation, high union density, high taxes and (except for a few years) Social Democratic political dominance, were the norms. 1 A strong commitment to the welfare state and jobs for all eventually cut across political party lines. Full employment was a national ethos and the top priority of economic policy. Swedes considered jobs the key to a normal life and the economic foundation of the welfare state. Sweden's benefit programs were developed to meet virtually all contingencies and include, among others: pensions; support for the unemployed that includes benefits, job training, retraining and job creation; disability and sickness benefits; health care; parental leave; child allowances; financial assistance for families with disabled children; and decent housing for all. Social provision of high quality services for the elderly, children, the ill and disabled greatly expanded the public sector and paid jobs for women. Swedish women have among the highest labor force participation rates in all the OECD countries. Going against the trend on a continent plagued by high unemployment, until the 1990s, unemployment averaged barely 2 percent; 3 percent, an extreme rarity, was political suicide and could and did help topple a government. The Unravelling THAT'S THE SWEDEN that was. But in the early 1990s, Sweden was hit by the worst economic slump since the 1930s, with 3 years of falling output, the rebirth of mass unemployment, a ballooning budget deficit, and draconian cuts and rule changes in income benefits and services. These started under a conservative-led coalition and continued under the Social Democrats. 2 What went wrong? Critics claim that the welfare state had simply become unsustainable and its cost had sent the budget deficit soaring. Yet shortly before the slump, Sweden still had full employment, a strong welfare state and a hefty budget surplus. To understand what happened, consider the background: the growing power of Swedish business, pressures from globalization and the race to join the European...
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This note was uploaded on 11/15/2009 for the course ILRCB 3020 at Cornell University (Engineering School).