Welfare states Sweden in comparative context

How welfare states differ  Minimalist v. maximalist: –Safety net below which none (or few?) are allowed to fall v. –Guarantees higher level of well-being, social protection  Universality  Treatment of women  Equality of entitlements  Scope of coverage  Insurance-based or funded from gov’t revenue  Pro-active v. reactive: –is economic activity rewarded or inactivity cushioned?  Ideological foundations: –Social Democratic, Christian Democratic, (Progressive) Liberal, or mixed?

Scope Basic safety net or is social protection extend to  Health care  Housing  Education  Entry into labour market  Overall well-being

Relationship to economic management  Finance –from general revenue –via build-up of special funds  Role of Keynsianism –Successful counter-cyclical mgmt > hi or full employment > less need to use certain entitlements & sufficient revenue to finance  Encourage activity via labour market policies? –apprenticeships –Training & retraining

Some cases:  UK: –minimalist, –Equal: flat-rate benefits and financing –Initially liberal, but increasingly mixed, with public- private partnerships (Thatcher & Blair innovations) –Included housing –Universal health care  France: lower levels, uneven,  Italy: uneven, family as backup

Germany & Netherlands Germany  Universal but unequal  Insurance-based  Complex: multiple programs & levels of protection  Labour market component –rely on handwerk: apprenticeships run by unions & employers associations Netherlands:  Universal but unequal  Insurance based  Complex  Changing: shift from reactive to active labour market policies –work-experience jobs –Training –Attempt to get unemployable employed  Health insurance: –minimum coverage universally required –top-up policies possible  Public-’private’ partnerships

Sweden  Universal & generally equal –‘superannuated’ pensions as exception  Shaped by Social Democrats  Broad protection  Emphasis on activity, participation  Use of –active labour market policies –Solidaristic wage policies  Housing

Wage & labour market policies  Active labour market policies –Managed by unions & employers assoc. –Emphasis on retraining & re-entry –Tied to unemployment benefits –Supplement by  public sector employment  Investment of pension funds in housing stock  Solidaristic wage policies: –Centrally negotiated –Insist on high average wage  Force firms relying on lower wages out of business  Hold wages down in higher value-added industries  Encourage ‘creative destruction’

Sweden continued:  Swedish model based on increasingly strained social partnership with low level of public ownership:  Basic Presumption: –LO & Soc Democrats can pursue social goals –Employers and owners can earn profit  Result in –Shift to higher value-added industries –concentration of ownership & capital

Friction points: limits of consensus  Pension debate (1956) –Superannuation (earnings-based pensions)  Voluntary or compulsory?  Private or public?  Level of taxation required  Co-determination (1970s) –LO & SD demand for union-managed wage-earners- funds, eventual co-ownership of industry  Desirability of central wage bargaining (ends in 1990)