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Generating Equality and Eliminating Poverty, The Swedish Way

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  • Anders Bjorklund
  • Richard B. Freeman

Abstract

Sweden has a remarkable record in reducing inequality and virtually eliminating poverty. This paper shows that: 1) Sweden achieved its egalitarian income distribution and eliminated poverty largely because of its system of earnings and income determination, not because of the homogeneity of the population nor of its educational system. 2) In the job market Sweden is distinguished by a relatively egalitarian distribution of hours of work among those employed, which may be an interrelated part of the Swedish economic system, and until the recent recession, by a high employment rate. 3) Tax and transfer policies contribute substantially to Sweden's overall distribution record. In contrast to many social welfare systems, Sweden's is largely a workfare system, providing benefits for those with some work activity. 4) Part of Sweden's historic success in maintaining jobs for low wage workers while raising their wages resulted from policies that directly or indirectly buttress demand for low skill workers, notably through public sector employment. 5) Sweden's tax and transfer policies have maintained the position of lower income workers and families, including those with children, during its recent economic decline.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4945.

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Date of creation: Dec 1994
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Publication status: published as Generating Equality and Eliminating Poverty, the Swedish Way , Anders Bjorklund, Richard B. Freeman. in The Welfare State in Transition: Reforming the Swedish Model , Freeman, Topel, and Swedenborg. 1997
Handle: RePEc:nbr:nberwo:4945

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