12월 112008

Assignment 1 : Free topic / HW2110 Sweden
– Past and Present 2008 Autumn, Kristianstad University, Sweden

NAME : Lee, Hunjae  Title : Swedish Welfare system



modern society it goes without saying that welfare system is essential to improve
and maintain one nation’s living. And Sweden is one of the most well-known
welfare states in the world. They have pretty old history of welfare system. At
first Scandinavian ministers Karl Kristian Steincke (Danish), Gustav Möller
(Swedish) constructed this model already in the 1930s and reformed several
times.(Rothstein, 1998) On the other hand, South Korea which has been developed
to 14th largest size of economy with highest speed is still
developing their social welfare system. They also have a basic structure but no
Koreans think it enough. According to OECD Report(2007), at spending money in public
social expenditure Korea(6% of GDP) is last on the list among 24 OECD member
countries(Average:21%) (OECD, 2007)

government announced plan to reach OECD average until 2030 in public social
expenditure few years ago. However, most of world economic expert advice that
you will have to increase tax as spending money grows and there will be bad
influence on economic growth, giving examples of some welfare countries
including Scandinavian countries, also Sweden. In other words the problem is
actually where and how to get and spend money not the amounts of money.

looking into Swedish welfare system will be good journey that help Korea make
good decision. In this paper you can catch a glimpse of their system with main
characteristics of concepts about welfare. There is also something recent to
check how Sweden changes now with world economic trend.


Welfare System

things in foreigners’ point of view

a picture is worth a thousand words. Welfare system that needs various
historical, political concepts and stories to be explained is more
comprehensible if you read some specific illustration rather than being told by
long-winded explanation, especially from others’ perspective.



student most amazing thing is that Swedish don’t just have free education but
also the books used are free.
if students are obliged to move from their municipality to study what they
want, the municipality charges with the costs of the transport. Moreover,
students can receive a periodic wage during their studies from the State (about
SEK 1200 per month), and lots of other advantages.
this could help Swedish young people obtain their independence earlier than others
in different country. Concerning the high level in Swedish education, students
who need help to finance their studies also receive assistance from the central


it comes to workplaces, Sweden has a high trade union membership; some 85
percent of wage-earners (blue-collar) and 75 percent of salaried (white-collar)
workers. Wage-earners are mainly members of unions within the Swedish Trade
Union Confederation (LO) and salaried workers are generally in unions within
the Swedish Confederation of Professional Employees (TCO) or the Swedish
Confederation of Professional Associations (SACO). Labor contracts normally run
for a period of 1-2 years and include agreements on wage increase for the
industry they concern. By law, the basic workweek is 40 hours. Overtime is
limited to 48 hours over a four week period and no more than 200 hours per

the worker becomes ill, the employer pays 80 percent of the total loss of
income for days 2-14. From day 15 and forward, the social insurance system pays
employees a sickness benefit of 80 percent of income. Maximum annual sick pay
for an employee is 7.5 times the price base amount, which corresponds to a
total of 302,200 SEK in 2007. There is no compensation paid for the first day
off of an illness period.

insurance, financed by employer contributions with state contributions, is
administered by trade unions. Unemployment payments are 80 percent of an
individual’s previous year’s income, with a maximum daily compensation of SEK
680, during the first 200 consecutive days of unemployment. Thereafter
unemployment payments are reduced to 70 percent. Compensation is paid during a
maximum of 300 days, or 450 days for an unemployed person with children.


health care, the state finances the bulk of health care costs, with the patient
paying a nominal fee for examinations and some tests. The state pays for
approximately 85 % of medical costs. When a physician declares a patient to be
ill for whatever reason (by signing a certificate of illness/unfitness), the
patient is paid a percentage of their normal daily wage from the second day.
For the first 14 days, the employer is required to pay this wage, and after
that the state pays the wage until the patient is declared fit. The state also
reimburses patients for travel costs to and from the clinic or hospital.


has also nice schemes to promote the equality between genders and the increase
in birthrate in the country.
the rich countries, young population is increasing too slowly in comparison to
the elder one. In Sweden exists family polices that promote opportunities for
both parents to combine their work with the care of their children. When a
child is born, Fathers and mothers are both entitled to draw parental
allowance. Parents decide who will draw the parental benefits. Parents,
combined, are entitled to 480 days of leave from work in order to care for
children, starting at birth. 60 days of these 480 are reserved for each parent,
but outside of this the parents are free to decide how to arrange parental
leave. The state social insurance system pays 80 percent of the normal wage for
the first 390 days, up to a maximum of SEK 403,000 per year, to the parent who
has decided to stay at home. After that, no matter the parents’ income, a parent
will receive SEK 180 per day. Fathers also may take ten days leave in
connection with the birth of a baby. Parents are entitled to leave to care for
sick children, up to a maximum of 60 days per child per year, with 80 percent
of the normal wage paid by the insurance system.


characteristics and concepts of the system


employment that had been pursued by Keynesian economics in 1950s~1960s is still
not a relic of the past, at least in Sweden. On 31 October the Swedish Minister
for Employment, Sven Otto Littorin told, “The
target is full employment. Anyone who wants to and can work should have the
possibility to do so. Our missions is to lower the thresholds to the labour
market so that more people can live on their salaries, be a part of the
community at a work place and have a future to look forward to
”, (Swedish
Chamber of Commerse, 2008) even if he belongs Moderate Party which is rather conservative,
liberal than Social Democrats. Because they know themselves who are givers as
well as recipients at the same time, this concept let nation recognize welfare
as civil right not as sympathy from rich.



the distinctive principles of the present Swedish welfare state are accepted as
universalism. It means that the state distributes welfare with as little
bureaucratic interference as possible, to all people who fulfill easily
established criteria, NOT just concerned with directing the resources to “the
people most in need”, the USA model. In USA model there is a sharp divide
between the receivers and the producers of social welfare, between
“us” and “them”, the producers tending to dismiss the whole
idea of social welfare because they will not receive anything of it (Bergh,
2004). That is why Swedish model is still getting a broad support for the
system since most people will receive at least something. Ensuring same rights for
blue-collar and white-collar employees, one universal insurance system works for
all in accordance with earnings.

is a special historic term referring this concept. “Folkhemmet”(the people’s home
in English). Hansson, the former Prime Minister in four governments between
1932 and 1946 introduced the concept in 1928, saying that Sweden should become
more like a “good home,” this being marked by equality and mutual
understanding. Hansson advocated that the traditional class society should then
be replaced by “the people’s home”. (Agius, 2007)
a result, Sweden became one of the first countries in the world to offer free
education at all levels, including all public universities. Also free universal
health care was provided by the state, along with many other services.



In the most general sense, the term solidarity
represents the ties that unite individuals into a common moral community; a
definition sometimes referred to as social solidarity. In welfare fields it is
the epithet frequently used to label welfare arrangements of the Scandinavian
type. This implies not only the features of universalism and a strong public
sector, but also a number of basic values such as equality, democracy and a
sense of the common good.

Actually it is a sort of political rhetoric to as
the justification for redistributive measures. Not only “Saltsjöbad agreement”,
the principal agreement between the Swedish confederacy of Labour (LO) and
Confederacy of Employers (SAF) in 1938 but also “Rhen-Meidner Solidaristic wage
policy model” that popped out in the end of the 1940s after long discussion
represents this concept well. (Bergmark et al, 2000) Their main message was
that the government must help the trade unions to pursue a policy of
responsibility through the means of a very strict finance and economic policy.
By rising taxes and holding back private demand the government would hold back
inflation, create island of unemployment, allow less productive firms to close
down, etc. At the same time the trade unions should follow the policy of “equal
pay for the same kind of work”.

In short the solidarity of other citizens is manifested
in their support for this system (e.g., through elections, political movement)
and in their willingness to provide for its financial base by paying taxes.
Because, the basic moral foundation of the welfare state is a common obligation
to care for one’s fellow citizens and, in particular, people with fewer
resources or in vulnerable life-phases.



of the welfare state is that it results in high taxes. This is usually true, as
evidenced by places like Denmark (tax level at 50.4% of GDP in 2002) and Sweden
(tax level at 50.2% of GDP in 2002). Such high taxes do not necessarily mean
less income for the nation overall, since the state taxes go directly to the
people it is taxed from. The real issue is that they result in a major
redistribution of that income from the citizens on the productive side of the
equation to the citizens on the welfare state side. (Although, of course,
higher taxes do mean less income overall, as citizens become less productive,
and the economic system becomes less efficient.) Thus, productive citizens
subsidize the lifestyle of the nonproductive or the underproductive. Another
criticism of this welfare system is the belief that welfare services provided
by the state are more expensive and less efficient than the same services would
be if provided by private businesses. Anything which is supplied free at the
point of consumption would be subject to artificially high demand. (Wikipedia,

this respect, the result of 2006 Swedish general election is remarkable. It
represents a seismic shift in Sweden’s political landscape, which has been
dominated for the last 12 years by the Social Democrats (have governed Sweden
for 65 of the last 74 years). It is also likely to indicate a significant
shake-up in Sweden’s welfare system. The new prime minister, Reinfeldt has
proposed a raft of measures aimed at reducing the tax burden, stimulating
employment, encouraging business and making the “social model” more
efficient. Among other changes he is advocating tax-cuts of 45 billion Swedish
Kroner ($6.2 billion); a reduction in unemployment benefit from 80 percent of
previous income to 65 percent; the removal of employer social charges for
companies in the service sector; and a reform of tax rules for small companies.
(CNN, 2006)



have reviewed Swedish welfare system and its main characteristics, also
criticism and some new political trend briefly. Returning to question in the
introduction of this paper, is the Swedish model still valid to be followed by
other countries as good example? Or now is it collapsed by Neo-liberalism and
globalization in economy?

this issue, there was also heated argument in the Korea. At the end of 2006
many of conservative media, press broadcasted and published that even Swedish
nation now changed their political direction. They made strong criticism at the
former president Roh and his government that wanted to make blueprint of
welfare system being modeled after Swedish system. And now the new government
started from 2008, that is so conservative but elected mainly because of world
economic crisis is decreasing the growth rate of the budget in welfare system. Unfortunately,
in welfare system Korea cannot make miraculous progress like their crazy
economic growth again.

my opinion about this question is that the both two answer is wrong. we don’t
really need to follow simple dichotomy. Unlike gossip in world press about
their new government, there is no Swedish people truly believe that turning
upside down their welfare system in the future. (Sven Hort, one professor of Södertörn
University College told) (Hankyoreh, 2006) But people’s main concern is the
outcome of welfare provision, not loyalty with the system as such. And even if
some political controversies still exist about how much and what parts of the
welfare system should be run by private entrepreneurs, there is political
acceptance overall for a pluralistic system, as long as it is mainly financed
and controlled within the public domain.

important thing that Swedish imply is not their system but their spirit, in
other words, the trust between government and nations or among people. Trust is
a cornerstone of any system exercising solidarity through the power of the
state. They believe that they can make new consensus for welfare policy during
adjusting their economy to world trend. And I hope Koreans do. Swedish system
is not a royal road to paradise as well as not a retired one. Koreans have to
develop their own model suited for their history, culture and situation by
taking good and leaving bad from the model.



C. (2007). Sweden’s 2006 Parliamentary Election and After: Contesting or
Consolidating the Swedish Model?. Parliamentary
Vol. 60 No. 4, 2007, 585–600

A. (2008) The Universal Welfare State: Theory and the Case of Sweden. Political Studies: Vol 52, 745–766

A., Thorslund, M., Lindberg, E. (2000). Beyond benevolence-solidarity and welfare
state transition in Sweden. International
Journal of Social Welfare
, 2000:9, 238-249.

in Sweden Agency). (2007). Living and
working in Sweden.
ISA, Stockholm

L. (2006). The Swedish model in historical context. Kobe University Economic Review 52.

B. (1998). Just Institutions Matter: The
Moral and Political Logic of the Universal Welfare State (Theories of
Institutional Design)
. Cambridge.


Web sources

2006-9-18, The insider’s guide to … Swedish politics


(2007). Economic survey of Korea 2007


chamber of commerce, 2008-10-31


Criticism of welfare state, 2008-11-28



 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>