The Swedish Welfare State: The Role of Supplementary Compensations

The Swedish welfare state has a social security system that covers many forms of income losses and gives a high compensation. Compensation is given for loss of income due to sick leave, parental leave, disability, work injury, unemployment and retirement at old age. But there are also complementing compensation systems. The most important ones are those decided by collective agreements between unions and employer associations. They are sometimes organized as an insurance, in other cases as an agreement that the employer should pay the compensation. There are also other forms of complements than those based on collective agreements, for example complementing unemployment insurances for members of unions. Even if the complements are organized in different ways, they add to the social insurances in more or less the same way. They give an addition under the ceiling in the social insurance systems, they give compensation over the ceiling so that they more or less eliminate the effects of the ceiling, and they lengthen the compensation period in some cases. This means that the consolidated welfare state differs in a systematic way from that which is determined by the Parliament. In this paper we describe the differences and discuss the factors that determine the differences between the two welfare states – the traditional one and the consolidated one.