The Swedish labour market model: performance under outside pressures

A key element in any “social model” is the institutional framework of the labour market. The Swedish set-up still builds on the Rehn-Meidner model which aims to simultaneously achieve low inflation, low unemployment, high economic growth and an equitable distribution of income. Openness and acceptance of structural change to keep competitiveness is compensated by income security. There is a clear division of roles, with the social partners responsible for wage-setting and the government responsible for helping the unemployed back into work. While Sweden continues to perform well relative to the EU as a whole, there has been an intensifying domestic debate on its labour market arrangements, related partly to the issues of EU enlargement and globalisation.