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

  • Anders Forslund

    (Uppsala University)

  • Alan B. Krueger

    (Princeton University and NBER)

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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File URL: http://www.princeton.edu/ceps/workingpapers/158krueger.pdf
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Paper provided by Princeton University, Department of Economics, Center for Economic Policy Studies. in its series Working Papers with number 1035.

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Date of creation: Mar 2008
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Handle: RePEc:pri:cepsud:158krueger
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  24. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
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  30. 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.
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