IDEAS home Printed from https://ideas.repec.org/h/nbr/nberch/5362.html
   My bibliography  Save this book chapter

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

Author

Listed:
  • Anders Forslund
  • Alan Krueger

Abstract

In the early 1990s the Swedish labor 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 labor market policies (cf e.g. Layard, Nickell and Jackman, 1991).
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Anders Forslund & Alan Krueger, 2010. "Did Active Labor Market Policies Help Sweden Rebound from the Depression of the Early 1990s?," NBER Chapters, in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 159-187, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:5362
    as

    Download full text from publisher

    File URL: http://www.nber.org/chapters/c5362.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    2. Widerstedt, Barbro, 1998. "Moving or Staying? Job Mobility as a Sorting Process," Umeå Economic Studies 464, Umeå University, Department of Economics.
    3. Stenberg, Anders, 2003. "An Evaluation of the Adult Education Initiative Relative Labor Market Training," Umeå Economic Studies 609, Umeå University, Department of Economics.
    4. Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, vol. 59(3), pages 313-334, March.
    5. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.
    6. Kent Eliasson & Urban Lindgren & Olle Westerlund, 2003. "Geographical Labour Mobility: Migration or Commuting?," Regional Studies, Taylor & Francis Journals, vol. 37(8), pages 827-837.
    7. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, Decembrie.
    8. Forslund, Anders & Johansson, Per & Lindqvist, Linus, 2004. "Employment subsidies - A fast lane from unemployment to work?," Working Paper Series 2004:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. Edin, P-A. & Holmlund, B., 1990. "Unemployment, Vacancies And Labour Market Programmes: Swedish Evidence," Papers 1990j, Uppsala - Working Paper Series.
    10. Namkee Ahn & José Ignacio García-Pérez, 2002. "Unemployment duration and workers' wage aspirations in Spain," Spanish Economic Review, Springer;Spanish Economic Association, vol. 4(2), pages 103-118.
    11. Forslund, Anders & Johansson, Kerstin, 2007. "Random and stock-flow models of labour market matching - Swedish evidence," Working Paper Series 2007:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Katz, Lawrence F. & Meyer, Bruce D., 1990. "The impact of the potential duration of unemployment benefits on the duration of unemployment," Journal of Public Economics, Elsevier, vol. 41(1), pages 45-72, February.
    13. Anders Forslund & Daniela Froberg & Linus Lindqvist, 2004. "The Swedish Activity Guarantee," OECD Social, Employment and Migration Working Papers 16, OECD Publishing.
    14. Helge Bennmarker & Kenneth Carling & Bertil Holmlund, 2007. "Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms," LABOUR, CEIS, vol. 21(1), pages 85-120, March.
    15. Ham, John C & Rea, Samuel A, Jr, 1987. "Unemployment Insurance and Male Unemployment Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 325-353, July.
    16. Carling, Kenneth & Richardson, Katarina, 2001. "The relative efficiency of labor market programs: Swedish experience from the 1990's," Working Paper Series 2001:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    17. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
    18. P. Jenkins, Stephen & Garcia-Serrano, Carlos, 2000. "Re-employment probabilities for Spanish men: what role does the unemployment benefit system play?," ISER Working Paper Series 2000-17, Institute for Social and Economic Research.
    19. Namkee Ahn & J. Ignacio Garcí-Pérez, "undated". "Unemployment duration and workers' wage aspirations in Spain," Working Papers 99-20, FEDEA.
    20. Carling, Kenneth & Richardson, Katarina, 2004. "The relative efficiency of labor market programs: Swedish experience from the 1990s," Labour Economics, Elsevier, vol. 11(3), pages 335-354, June.
    21. Holmlund, Bertil & Lundborg, Per, 1988. "Unemployment Insurance and Union Wage Setting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(2), pages 161-172.
    22. Barbara Sianesi, 2002. "Swedish active labour market programmes in the 1990s: overall effectiveness and differential performance," IFS Working Papers W02/03, Institute for Fiscal Studies.
    23. Fredriksson, Peter & Johansson, Per, 2003. "Employment, Mobility, and Active Labor Market Programs," Working Paper Series 2003:5, Uppsala University, Department of Economics.
    24. Anders Forslund & Alan B. Krueger, 1997. "An Evaluation of the Swedish Active Labor Market Policy: New and Received Wisdom," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 267-298, National Bureau of Economic Research, Inc.
    25. Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    26. Albrecht, James & van den Berg, Gerard J & Vroman, Susan, 2004. "The knowledge lift: The Swedish adult education program that aimed to eliminate low worker skill levels," Working Paper Series 2004:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    27. Anders Stenberg, 2005. "Comprehensive Education for the Unemployed — Evaluating the Effects on Unemployment of the Adult Education Initiative in Sweden," LABOUR, CEIS, vol. 19(1), pages 123-146, March.
    28. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
    29. Card, David & Levine, Phillip B., 1994. "Unemployment insurance taxes and the cyclical and seasonal properties of unemployment," Journal of Public Economics, Elsevier, vol. 53(1), pages 1-29, January.
    30. Richard Jackman & Christopher A. Pissarides & S Savouri, 1990. "Labour Market Policies and Unemployment in the OECD," CEP Discussion Papers dp0011, Centre for Economic Performance, LSE.
    31. Brigitte Dormont & Denis Fougère & Ana Prieto, 2001. "L'effet de l'allocation unique dégressive sur la reprise d'emploi," Économie et Statistique, Programme National Persée, vol. 343(1), pages 3-28.
    32. Stenberg, Anders & Westerlund, Olle, 2008. "Does comprehensive education work for the long-term unemployed," Labour Economics, Elsevier, vol. 15(1), pages 54-67, February.
    33. Lindgren, Urban & Westerlund, Olle, 2003. "Labour market programmes and geographical mobility: migration and commuting among programme participants and openly unemployed," Working Paper Series 2003:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    34. Freeman, Richard B. & Topel, Robert H. & Swedenborg, Birgitta (ed.), 1997. "The Welfare State in Transition," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261782, January.
    35. Anders Forslund & Oskar Nordström Stans, 2006. "Swedish Youth Labour Market Policies Revisited," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 168-185.
    36. Fredriksson, Peter, 1999. "The Dynamics of Regional Labor Markets and Active Labor Market Policy: Swedish Evidence," Oxford Economic Papers, Oxford University Press, vol. 51(4), pages 623-648, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bart Hobijn & Aysegul Sahin, 2013. "Beveridge Curve Shifts across Countries since the Great Recession," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(4), pages 566-600, December.
    2. Forslund, Anders, 2019. "Employment outcomes and policies in Sweden during recent decades," Working Paper Series 2019:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Hansen, Ellen, & Avila, Zulum., 2012. "Preliminary assessment of training and retraining programmes implemented in response to the Great Recession :," ILO Working Papers 994684193402676, International Labour Organization.
    4. repec:ilo:ilowps:468419 is not listed on IDEAS
    5. Ulku,Hulya & Muzi,Silvia, 2015. "Labor market regulations and outcomes in Sweden : a comparative analysis of recent trends," Policy Research Working Paper Series 7229, The World Bank.
    6. Walter Nicholson & Karen Needels & Heinrich Hock, 2014. "Unemployment Compensation During the Great Recession: Theory and Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(1), pages 187-218, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:pri:cepsud:158krueger is not listed on IDEAS
    2. Anders Forslund & Alan Krueger, 2010. "Did Active Labor Market Policies Help Sweden Rebound from the Depression of the Early 1990s?," NBER Chapters, in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 159-187, National Bureau of Economic Research, Inc.
    3. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, July.
    4. Milan Vodopivec, 2004. "Income Support for the Unemployed : Issues and Options," World Bank Publications - Books, The World Bank Group, number 14922, December.
    5. Calmfors, Lars & Forslund, Anders & Hemström, Maria, 2002. "Does active labour market policy work? Lessons from the Swedish experiences," Working Paper Series 2002:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Kluve, Jochen & Fertig, Michael & Jacobi, Lena & Nima, Leonhard & Schaffner, Sandra & Schmidt, Christoph M. & Card, David & Góra, Marek & Jensen, Peter & Leetmaa, Reelika & Patacchini, Eleonora & van , 2005. "Study on the effectiveness of ALMPs: Research project for the European Commission, DG Employment, Social Affairs and Equal Opportunities. Final report," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 69929, December.
    7. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers and Notes 25529, The World Bank.
    8. Bart, COCKX & Jean, RIES, 2004. "The Exhaustion of Unemployment Benefits in Belgium. Does it Enhance the Probability of Employment ?," LIDAM Discussion Papers IRES 2004016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    9. Bennmarker, Helge & Skans, Oskar Nordström & Vikman, Ulrika, 2013. "Workfare for the old and long-term unemployed," Labour Economics, Elsevier, vol. 25(C), pages 25-34.
    10. Aysit Tansel & H. Mehmet Taşçı, 2010. "Hazard Analysis of Unemployment Duration by Gender in a Developing Country: The Case of Turkey," LABOUR, CEIS, vol. 24(4), pages 501-530, December.
    11. Emmanuel Duguet & Florent Frémigacci & Yannick L’Horty, 2008. "Indemnisation du chômage et retour à l’emploi : un examen économétrique," Documents de recherche 08-07, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    12. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    13. Stephen Nickell, 2003. "A Picture of European Unemployment: Success and Failure," CEP Discussion Papers dp0577, Centre for Economic Performance, LSE.
    14. Bergemann, Annette & van den Berg, Gerard J., 2008. "From Giving Birth to Paid Labor: The Effects of Adult Education for Prime-Aged Mothers," IZA Discussion Papers 3600, Institute of Labor Economics (IZA).
    15. Holmlund, B., 1997. "Unemployment Insurance in Theory and Practice," CEPR Discussion Papers 380, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    16. Knut Roed & Tao Zhang, 2003. "Does Unemployment Compensation Affect Unemployment Duration?," Economic Journal, Royal Economic Society, vol. 113(484), pages 190-206, January.
    17. Lalive, Rafael & Zweimuller, Josef, 2004. "Benefit entitlement and unemployment duration: The role of policy endogeneity," Journal of Public Economics, Elsevier, vol. 88(12), pages 2587-2616, December.
    18. Stephen P. Jenkins & Carlos García-Serrano, 2000. "Re-employment Probabilities for Spanish Men: What Role Does the Unemployment Benefit System Play?," Discussion Papers of DIW Berlin 216, DIW Berlin, German Institute for Economic Research.
    19. Rafael Lalive & Jan Van Ours & Josef Zweimuller, 2006. "How Changes in Financial Incentives Affect the Duration of Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 1009-1038.
    20. Zhe Wang, 2020. "Unemployment across the Euro Area: The Role of Shocks and Labor Market Institutions," Economics Discussion Papers em-dp2020-05, Department of Economics, University of Reading.
    21. Rafael Lalive & Jan Ours & Josef Zweimüller, 2011. "Equilibrium unemployment and the duration of unemployment benefits," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1385-1409, October.

    More about this item

    JEL classification:

    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberch:5362. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.