The Swedish Welfare State Model: A Brief Overview

Benny Carlson, Neelambar Hatti


The Swedish welfare state model has its roots in home turf as well as in the soil of othernations, mainly Germany and Britain. It took on its characteristic shape as the People’s Home in the 1930s, when national models to the left and right of the political spectrum in many countries were built around “the people”. At the time it was also labelled “the middle way” between capitalism and socialism. During the 1960s “record years” the Swedish welfare state grew rapidly. It stood at its zenith around 1970, hailed internationally as the Swedish model. However, the welfare state and the economy,closely intertwined, soon entered into a protracted structural crisis. In the early 1990s,Sweden experienced a deep and to a large extent home-made financial crisis and the Swedish model became a warning example in some quarters. Out of the crisis arose a revised model in which welfare services were still provided more or less “for free” (i.e.funded by tax money) while at the same time there were customer/user choice of and competition between public and private providers. Today this revised model is under attack due to the existence of “welfare profits”. It is also challenged by demographic developments – an ageing population and many immigrants lacking entry to the labour market.

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