Unemployment Insurance System and Active Labor Market Policy in Sweden

Abstract

The article concerns Sweden’s unemployment insurance and active labor market policy. A longstanding champion of the Ghent model, which incorporates voluntary unemployment insurance and state-led labor market interventions, Sweden had to make significant cuts to insurance coverage since the 1990s, in keeping with neoliberal restructuring and retrenchment. As a result, unemployment insurance has developed into a multi-pillar system that includes a supplemental income insurance plan. Consequently, the percentage of jobseeker’s allowance claimants has increased. Meanwhile, the focus of active labor market policy shifted away from labor market integration toward promoting job-seeking activities, gradually aligning with market mechanisms, with reform underway geared toward privatizing public employment services. Despite Sweden’s unemployment rate nearing 10 percent this year, there has been little discussion about protecting the unemployed or improving active market policies. The potential impact of these ongoing changes on the protection and long-term labor market integration of unemployed individuals warrants further attention.