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Did Active Labor Market Policies Help Sweden Rebound from the Depression of the Early 1990s?

In: Reforming the Welfare State: Recovery and Beyond in Sweden

  • Anders Forslund
  • Alan Krueger

In the early 1990s the Swedish labour market was hit by the worst shock it experienced since the 1930s, with the unemployment rate rising to 10 percent. This development stands out in light of Sweden’s performance in the post-war period. Between the mid 1940s and the crisis of the 1990s, the Swedish unemployment rate oscillated between one percent and just under four percent (Figure 1). Unemployment even remained low in the 1970s despite oil price shocks that led to persistently high unemployment elsewhere in Europe. A natural question is what, if anything, in Swedish institutions and policies explains why Sweden’s unemployment rate did not follow the same pattern as in most western European countries? A factor often mentioned for this envious performance is Sweden’s active labour market policies (cf e.g. Layard, Nickell and Jackman, 1991).

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This chapter was published in:
  • Richard B. Freeman & Birgitta Swedenborg & Robert Topel, 2010. "Reforming the Welfare State: Recovery and Beyond in Sweden," NBER Books, National Bureau of Economic Research, Inc, number free05-1, December.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 5362.
    Handle: RePEc:nbr:nberch:5362
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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