Financial Sustainability of Swedish Welfare Commitments

Sweden's welfare commitment is one of the most extensive of all high-income countries. Total social expenditures in Sweden - public and private - on pensions, health care and sickness insurance, family policy, unemployment insurance and employment services, and benefits and care services for the functionally disabled and care of the elderly have remained very close to 28 percent of GDP (26 percent after tax on taxable benefits) since 1980. This article explains how Sweden has dealt with the many questions of creating adequate, sustainable and economically efficient social policy. It focuses on the roles of policy supporting labor force growth, benefit and service system construction, and a political consensus reached in the mid-1990s on the budgetary process and debt management.