Chapter 7: Future challenges for the welfare state
Little Sweden has taken in far more refugees per capita than any country in Europe. But in doing so, it’s tearing itself apart. (James Traub)1
Can the welfare state be in a crisis when public debt is low, GDP growth is strong and there are no rating institutes knocking on the door with credit downgrades?
Alas, the answer is yes. It will take a different shape than the crisis initiated and fueled by the throes of spiraling public debt that the Social Democratic government was able to bring under control in the 1990s. It will also take a different form than reversing the growing disincentive to work and the high rates of absenteeism that were the main targets of the reforms by the Center-Right governments in 2006–14.
Granted, Sweden is a country where most things work reasonably well and so far public trust has been high. Though Sweden has experienced one of the largest increases in income inequality in the OECD, the level still remains one of the lowest in the world. Those who wish for a return to the lower levels of inequality prevailing in the 1970s and 1980s tend to disregard the unsustainability of the Swedish Model in those decades. There were many destructive conflicts in the labor market and incentives for entrepreneurship and work were crumbling.
Looking ahead, it could appear that Sweden’s starting position to address the challenges from digitalization and immigration is good. There is...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.