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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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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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  2. James Albrecht (Georgetown University), Gerard J. van den Berg (Free University Amsterdam), and Susan Vroman (Georgetown University), 2005. "The Knowledge Lift: The Swedish Adult Education Program that Aimed to Eliminate Low Worker Skill Levels," Working Papers gueconwpa~05-05-08, Georgetown University, Department of Economics.
  3. Stenberg, Anders & Westerlund, Olle, 2004. "Does Comprehensive Education Work for the Long-term Unemployed?," Umeå Economic Studies 641, Umeå University, Department of Economics.
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  8. 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.
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  10. 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 623-48, October.
  11. 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.
  12. Forslund, Anders & Nordström Skans, Oskar, 2006. "Swedish youth labour market policies revisited," Working Paper Series 2006:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  13. Namkee Ahn & J. Ignacio García Pérez, 2000. "Unemployment duration and workers' wage aspirations in Spain," Economics Working Papers 426, Department of Economics and Business, Universitat Pompeu Fabra.
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  15. Widerstedt, Barbro, 1998. "Moving or Staying? Job Mobility as a Sorting Process," Umeå Economic Studies 464, Umeå University, Department of Economics.
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  18. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.
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  20. 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.
  21. 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.
  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. Anders Forslund & Daniela Froberg & Linus Lindqvist, 2004. "The Swedish Activity Guarantee," OECD Social, Employment and Migration Working Papers 16, OECD Publishing.
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  25. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
  26. 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.
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  28. 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.
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