Changing Scandinavian Welfare States: Which Way Forward?

Abstract

The Scandinavian welfare model is characterized by high spending, strong universal public services, high social investment, and relatively high equality in gender roles. The three main Scandinavian countries (Denmark, Norway, and Sweden) have successfully reformed their welfare systems to contain costs and manage population ageing. They have reformed unemployment and disability benefits to increase labour force participation and have cut spending on activation, although it remains relatively high. They have maintained strong employment levels. There are real differences in development pathways: Denmark has experienced the most stringent financial pressures, has cut spending, and moved towards work-first benefits most strongly; oil revenues have sustained the tax base in Norway and permitted the country to make relatively few changes; Sweden has cut the rates of unemployment benefits sharply and moved furthest in expanding the private-market delivery of services. Immigration is a major political challenge in Denmark and is emerging as such in Norway, but not in Sweden.