Academic journal article Social Security Bulletin

Sweden: A Welfare State in Need

Academic journal article Social Security Bulletin

Sweden: A Welfare State in Need

Article excerpt

Historically, unemployment in Sweden has been held to a bare minimum-about 2 to 3 percent of the labor force. However, in the last decade or so, low unemployment has depended increasingly on an expansion of the public sector work force and less and less on job creation in private industry and commerce. Between 1979 and 1991, the Government's payroll grew by over 50 percent, rising from 21 percent to 33 percent of total employment. By 1989, the Swedish Government spending had reached 57 percent of the gross domestic product (GDP). Accompanying this large expansion of the public sector were new monetary policies, including inflation-inducing periodic devaluations of the krona.

Despite these efforts to shield the labor force from high unemployment, joblessness reached 14 percent by the close of 1993, which is even higher than the 12 percent that is being experienced across the European Union. To worsen matters, Swedish economic output decreased by 7 percent since 1990. Sweden may have to trim its overall welfare program in line with the country's economic wherewithal. …

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