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The welfare of Sweden's old-age pensioners in times of bust and boom from 1990

Published online by Cambridge University Press:  21 April 2009

BJÖRN GUSTAFSSON ,
MATS JOHANSSON  and
EDWARD PALMER
BJÖRN GUSTAFSSON*
Affiliation:
Department of Social Work, University of Göteborg, Sweden and Institute for the Study of Labour, Bonn, Germany.
MATS JOHANSSON
Affiliation:
Swedish Social Insurance Agency, Stockholm, Sweden.
EDWARD PALMER
Affiliation:
Swedish Social Insurance Agency, Stockholm, Sweden. Department of Economics, Uppsala University, Sweden.
*
Address for correspondence: Björn Gustafsson, Department of Social Work, University of Göteborg, P.O. Box 720, SE 405 30 Göteborg, Sweden. E-mail: [email protected]
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Abstract

This study analyses the development of the economic wellbeing of Swedes aged 65 years and older from 1990. This period was characterised by Sweden's deepest and most prolonged recession since the Great Depression, but was then followed by buoyant growth. In a series of interventions from 1991 through to 1998, pensions were cut and their full price indexation abandoned. In spite of these dramatic measures, this study shows that pensioners fared better than the working-age population, but also that poverty among older Swedes increased in absolute terms. During the following years of rapid economic growth, in contrast, the growth in pensioners' income fell behind that of workers and their relative poverty increased. The analysis shows that the limited resources of many older Swedes put them close to a social poverty line. The study also shows that income inequality among older Swedes has grown with the increasing importance of capital income for the better off. We conclude that the increasing gap between better-off and worse-off older people raises issues about the future provision of expenditures on public services for them. The paper concludes that, overall, poverty among older people in Sweden remains low by international standards and that the Swedish welfare state has maintained its resilience.

Keywords

Swedenwelfarepensionsincomepovertyincome inequalitysocial securityold age
Type
Research Article
Information
Ageing & Society , Volume 29 , Issue 4 , May 2009 , pp. 539 - 561
Copyright
Copyright © 2009 Cambridge University Press

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