Title

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

Author(s)

Anders Forslund Anders Forslund (Uppsala University)

Alan B. Krueger Alan Krueger (Princeton University and NBER)

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).

Creation Date

2008-03

Section URL ID

CEPS

Paper Number

158

URL

https://gceps.princeton.edu/wp-content/uploads/2017/01/158krueger.pdf

File Function

Jel

J88, E32

Keyword(s)

Sweden

Suppress

false

Series

3