Public Sector Shock

Public Sector Shock

The Impact of Policy Retrenchment in Europe

Edited by Daniel Vaughan-Whitehead

The goal of this volume is to study this ‘public sector shock’. While budgetary reforms seek to ensure a more balanced and sound economic policy, they may generate new work inequalities among public sector employees, most particularly among women, who account for a considerable proportion of public sector employment. Cuts in education and training may also have an impact on the quality of human capital in both the public and private sectors, despite the fact that the recent crisis has shown the value of education as employees with better skills and training are more likely to maintain their jobs and incomes.

Chapter 14: Early fiscal consolidation and negotiated flexibility in Sweden: A fair way out of the crisis?

Dominique Anxo

Subjects: economics and finance, labour economics, public sector economics, social policy and sociology, economics of social policy, labour policy


Despite a wave of privatizations and liberalization of a large part of the service sector during the 1990s, Sweden’s public sector remains large, by international standards, reflecting strong public and political involvement in the provision of a wide range of services. The tendency towards retrenchment of the public sector and increased competition since the mid-1990s, common to many modern economies, have led to a decrease in public employment, but the share of public employees in total employment remains one of the highest among OECD countries (31 per cent in 2010). During the early phase of the current crisis (2008–09), employment declined in the female-dominated public sector, in particular at the municipality and county levels, which are in charge of the provision of social services, health care, and primary and secondary education. However, the employment decline in the public sector was relatively short-lived and heavily concentrated on employees with fixed-term contracts. At the end of 2011, public sector employment was almost at the same level as before the onset of the Great Recession.

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