Saving the Swedish model: Learning from Sweden’s return to full employment in the late 1990s
In the mid to late 1990s, Sweden's economy staged a remarkable resurgence from a three-year-long recession which had left it with the largest government budget deficit in the OECD. In this essay for IPPR, former Swedish finance minister Par Nuder reflects on the policies and politics that enabled his country's recovery.
In the early 1990s, the Swedish labour market was hit by the worst shock it had experienced since the 1930s. Between the summers of 1990 and 1993, Sweden suffered three years of negative growth. The peak-to-trough fall in GDP was nearly 5 per cent, total employment fell by more than 12 per cent from 1990 to 1994, and employment in manufacturing fell by almost one-quarter.
The Social Democrats returned to power in 1994. It took four years for the government to balance the budget. Between 1994 and 2006, the Swedish economy created 400,000 new jobs, equivalent to 9 per cent of the labour force, and by the end of that period Sweden had the second-highest employment rate in the EU.
Par Nuder is a former Social Democrat MP who served as finance minister during the vital early years of Sweden's employment fight-back. Key points from his essay include:
- The Swedish approach was based on clear value, underpinned by the 'Swedish model', which incorporates such priorities as lifelong learning, protecting people not jobs, and the importance of active labour market policies.
- Pro-employment policies were future-focused, based on a long-term analysis of what the economy would look like after the recession.
- The politics of budget-balancing and labour market reform were attached to a broader vision, proving that the Swedish model was not dead and turning the fight against unemployment into a national project.
In the news
Long-term unemplyment still 'worryingly high'
Evening Standard - 15 Nov 2012
UK could learn from Sweden to aid recovery
ITV News - 15 Nov 2012
Author(s) : Kayte Lawton - 20 Nov 2012
You may be interested in...
IPPR in the news
Mervyn King's housing warning is too little, too late
The Guardian - 21 May 2013Nigel Farage and Alex Salmond trade insults in battle of nationalists
The Guardian - 20 May 2013Local solutions are the key to full employment
New Statesman, Staggers blog - 20 May 2013Exam fail kids are facing jobs woe
The Sun - 15 May 2013
Will Ed Miliband be the Doctor Who of politics?
The Telegraph - 14 May 2013Labour will not be able to meet child poverty targets, says thinktank chief
The Guardian - 13 May 2013Slave-to-work dads ‘being squeezed out of family life,' says MP Jon Cruddas
Manchester Evening News - 13 May 2013Laptop U: Has the future of college moved online?
The New Yorker - 13 May 2013
Ed Cox on 'two-speed Britain'
Observer - 12 May 2013Francis Maude to consider fixed terms for top mandarins
Financial Times (£) - 12 May 2013Childcare reforms in chaos
Daily Mirror - 10 May 2013Sarah Mulley on the Queen's speech (2 mins 55s)
Channel 4 News - 09 May 2013
Queen's Speech 2013: Economist Attacks Immigration Curbs
Huffington Post - 09 May 2013Follow Macmillan and build, build, build
New Statesman - 08 May 2013School inspections deeply toxic, thinktank says
The Guardian - 08 May 2013School League Tables Damaging To Students' Vocational Education, Warns IPPR
Huffington Post - 08 May 2013
A common sense policy to create jobs and combat what ails Britain
The Independent - 07 May 2013250,000 children could suffer due to league table changes
The Telegraph - 07 May 2013Tories braced for big losses in council polls
The Guardian - 03 May 2013Guy Lodge on compulsory voting (47 mins)
BBC Radio 4 PM - 30 Apr 2013