Employment, Poverty and Globalization
Edited by Hans-Jürgen Andreß and Henning Lohmann
Chapter 6: In-Work Poverty in a Transitional Labour Market: Sweden, 1988–2003
Björn Halleröd and Daniel Larsson INTRODUCTION The labour market is a society’s main provider of economic resources, and the link between poverty and such factors as unemployment, early retirement, and so on is indisputable. Employment is therefore naturally seen as the main cure for poverty, while family and income transfer systems constitute an alternative support network in cases where employment fails. However, the working poor challenge this view, since their very existence implies that the labour market creates jobs with wages that are too low and/or employment contracts that are not secure enough to keep people out of poverty. Thus, if a substantial share of the poor are working poor, we need to reconsider the traditional view of the relationship between employment and poverty. In this chapter, we examine the relationship between labour market position and in-work poverty in Sweden. We look at the period from 1988 to 2003 with special emphasis on three time periods: the late 1980s, the mid1990s and the early years of the second millennium. These periods of time represent three distinctive situations. In the late 1980s, the Swedish labour market was characterized by a high employment rate and an extremely low unemployment rate. At the beginning of the 1990s, this situation changed radically, with skyrocketing unemployment and a shrinking employment rate. By the turn of the millennium, the economy was solidly back on track. However, at this point, the country’s economic policy was focused on low inﬂation rather than on full employment....
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