The Swedish Labour Market Model in a Globalised World

Active labor market policy has been a trademark of Swedish economic politics. Specific institutional features which go way back to the 1930ties help to explain why Sweden and the other ‘Nordics’ have been so relatively successful in recent years in combining high welfare with economic growth and high employment levels. A commitment to full employment and to an open economy brought about a proactive attitude towards structural change, thereby creating the famous Swedish ‘work line’ which aims at protecting employment as such rather than particular jobs. The institutional framework behind is strong social partners. Even though globalization puts additional pressure on the system and demands ever more skilful political and economic governance, most recent experiences suggest that the model might be sustainable. In the context of a rapidly changing economy in an aging society it might even become more important in the future.