The Labour Market Triangle

The Labour Market Triangle

Employment Protection, Unemployment Compensation and Activation in Europe

Globalization and Welfare series

Edited by Paul de Beer and Trudie Schils

Currently, European governments are being challenged to find an optimal social policy strategy that fosters 'flexicurity’, whereby a flexible, well-functioning labour market is achieved, whilst protection for workers is maintained. This fascinating book presents an in-depth study of the particular combination of unemployment insurance, employment protection and active labour market policies prevalent in seven European countries. The editors explore the formal laws and regulations, as well as the administration and implementation of social policy, paying special attention to the role of the social partners. The country comparison shows that the combination of social policy instruments is important to labour market performance, but that multiple optimal mixes already seem to exist.

Chapter 2: Sweden

Eskil Wadensjö

Subjects: economics and finance, labour economics, social policy and sociology, comparative social policy, labour policy


Eskil Wadensjö INTRODUCTION Swedish labour market policy has a tradition of relying on collective agreements between employers’ associations and trade unions and on active labour market policy. The work principle has guided the formulation of active labour market policies. Passive labour market policy – unemployment insurance – was introduced relatively late and was not very generous at the start. The trade unions and the employers’ associations developed rapidly in the early twentieth century and reached an agreement on respecting collective agreements in 1938, known as Saltsjöbadsavtalet (Edlund et al. 1989). In 1928, rules regarding collective agreements were legislated and a special court for conflicts regarding the interpretation of collective agreements was founded, the Arbetsdomstolen. During the Second World War the labour market was regulated in various ways as part of the mobilization efforts but the regulations were dismantled after the war. The state did not intervene to any major extent in the labour market up to the 1970s. In the 1970s various labour laws were introduced, however. The most important was the Job Security Law (LAS). This law stated rules for lay-offs. The principle of ‘last in, first out’ was established, but with the possibility for employers to reach agreements with the trade unions on exceptions to this rule. There have only been minor changes in labour legislation since the 1970s. UNEMPLOYMENT INSURANCE The first trade union unemployment insurance societies in Sweden emerged in the late nineteenth century. They were not supported by the state. For the unemployed who were not...

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