Hostname: page-component-cd9895bd7-8ctnn Total loading time: 0 Render date: 2024-12-23T05:03:29.449Z Has data issue: false hasContentIssue false
  • English
  • Français

The Nordic Welfare Model in the Twenty-First Century: The Bumble-Bee Still Flies!

Part of: SPS Beveridge Report Archive Collection

Published online by Cambridge University Press:  08 April 2015

Rune Halvorsen ,
Bjørn Hvinden  and
Mi Ah Schoyen
Rune Halvorsen
Affiliation:
Department of Social Work and Social Policy, Oslo and Akershus University College E-mail: [email protected]
Bjørn Hvinden
Affiliation:
NOVA Norwegian Social Research, Oslo and Akershus University College E-mail: [email protected]
Mi Ah Schoyen
Affiliation:
NOVA Norwegian Social Research, Oslo and Akershus University College E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

The Nordic countries are admired for high employment, low levels of poverty and inequality, encompassing welfare states, and peaceful industrial relations. Yet the model is criticised for hampering the employment opportunities of vulnerable groups. The literature identifies several potential mechanisms of exclusion. Compressed wage structures may make employers reluctant to hire certain workers for fear that their productivity is too low to justify the cost. Second, generous benefits lower individuals’ incentive to work. Third, businesses increasingly specialise in high-skill activities. We explore these arguments comparatively by considering the employment chances of two vulnerable groups: disabled persons and migrants. The Nordic countries are compared with other rich democracies that take different approaches to social protection and wage dispersion. The Nordic countries do not perform systematically worse than other ‘varieties of capitalism’. In line with recent research, we also find that there is considerable intra-Nordic variation, which calls for further study.

Keywords

EmploymentglobalisationNordic modelvulnerable groupswage distribution
Type
Articles
Information
Social Policy and Society , Volume 15 , Issue 1 , January 2016 , pp. 57 - 73
Copyright
Copyright © Cambridge University Press 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adsera, A. and Chiswick, B. R. (2004) Are There Gender and Country of Origin Differences in Immigrant Labor Market Outcomes across European Destinations?, IZA, Discussion Paper 1432, Bonn: IZA.Google Scholar
Andersen, T. M., Holmström, B., Honkapohja, S., Korkman, S., Söderström, H. T. and Vartiainen, J. (2007) The Nordic Model: Embracing Globalization and Sharing Risks, Helsinki: The Research Institute of the Finnish Economy (ETLA).Google Scholar
Arts, W. and Gelissen, J. (2002) ‘Three worlds of welfare capitalism or more? A-state-of-the-art report’, European Journal of Social Policy, 12, 2, 137–58.Google Scholar
Barth, E. and Moene, K. O. (2012) ‘Employment as a price or prize of equality: a descriptive analysis’, Nordic Journal of Working Life Studies, 2, 2, 5–33.Google Scholar
Bauer, T. K., Kluve, J., Schaffner, S. and Schmidt, C. M. (2008) Fiscal Effects of Minimum Wages: An Analysis for Germany, IZA Discussion Paper 3875, Bonn: IZA.Google Scholar
Baumol, W. J. (1967) ‘Macroeconomics of unbalanced growth: the anatomy of urban crisis’, American Economic Review, 57, 3, 415–26.Google Scholar
Calmfors, L., Drifill, J., Honkapohja, S. and Giavazzi, F. (1988) ‘Bargaining structure, corporatism and macroeconomic performance’, Economic Policy, 3, 6, 13–61.Google Scholar
Card, D. (2011) ‘Origins of the unemployment rate: the lasting legacy of measurement without theory’, American Economic Review, 101, 3, 552–7.Google Scholar
Card, D. and Krueger, A. B. (1994) ‘Minimum wages and employment: a case study of the fast-food industry in New Jersey and Pennsylvania’, The American Economic Review, 84, 4, 772–93.Google Scholar
Causa, O. and Jean, S. (2007) Integration of Immigrants in OECD Countries: Do Policies Matter?, Economics Department Working Papers 564, Paris: OECD.Google Scholar
Dickens, R., Machin, S. and Manning, A. (1999) ‘The effects of minimum wages on employment: theory and evidence from Britain’, Journal of Labor Economics, 17, 1, 1–22.Google Scholar
Einhorn, E. S. and Logue, J. (2004) ‘Can the Scandinavian model adapt to globalization?’, Scandinavian Studies, 76, 4, 501–34.Google Scholar
Eldring, L. and Alsos, K. (2012) European Minimum Wage: A Nordic Outlook, Oslo: Fafo.Google Scholar
Erikson, C. L. and Ichino, A. (1994) Wage Differentials in Italy: Market Forces, Institutions and Inflation, Working Paper 4922, Cambridge, MA: National Bureau of Economic Research.Google Scholar
Freeman, R. B. and Nickell, S. (1988) ‘Labour market institutions and economic performance’, Economic Policy, 3, 6, 63–80.CrossRefGoogle Scholar
Greve, B. (2009) The Labour Market Situation of Disabled People in European Countries and Implementation of Employment Policies: A Summary of Evidence from Country Reports and Research Studies, Leeds: Academic Network of European Disability Experts (ANED), http://www.disability-europe.net/content/aned/media/ANED%20Task%206%20final%20report%20-%20final%20version%2017-04-09.pdf [accessed 29.09.2014].Google Scholar
Hall, P. A. (1993) ‘Policy paradigms, social learning, and the state: the case of economic policymaking in Britain’, Comparative Politics, 25, 3, 275–96.Google Scholar
Hall, P. and Soskice, D. (2001) Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford: Oxford University Press.Google Scholar
Halvorsen, R. and Hvinden, B. (2014) ‘Nordic reforms to improve the labour market participation of vulnerable youth: an effective new approach?’, International Social Security Review, 67, 2, 29–47.Google Scholar
Halvorsen, R. and Hvinden, B. (2015) New Policies to Promote Youth Inclusion: Accommodation of Diversity in the Nordic Welfare States, Copenhagen: Nordic Council of Ministers.Google Scholar
Howell, D. R. and Hubler, F. (2005) ‘Wage compression and the unemployment crisis: labor market institutions, skills, and inequality–unemployment tradeoffs’, in Howell, D. R. (ed.), Fighting Unemployment: The Limits of Free Market Orthodoxy, Oxford: Oxford University Press, pp. 35–74.Google Scholar
Hussain, M. A., Kangas, O. and Kvist, J. (2012) ‘Welfare state institutions, unemployment and poverty: comparative analysis of unemployment benefits and labour market participation in 15 European Union countries’, in Kvist, J., Fritzell, J., Hvinden, B. and Kangas, O. (eds.), Changing Social Equality: The Nordic Welfare Model in the 21st Century, Bristol: The Policy Press, pp. 119–43.Google Scholar
Hvinden, B. (2010) ‘The Nordic welfare model and the challenge of globalisation’, in Böss, M. (ed.), The Nation-State in Transformation: Economic Globalisation, Institutional Mediation and Political Values, Aarhus: Aarhus University Press, pp. 292–314.Google Scholar
Hvinden, B. (2013) ‘Disability’, in Greve, B. (ed.), The Routledge Handbook of the Welfare State, London and New York: Routledge.Google Scholar
ISSA (2002) Who Returns to Work and Why? Evidence and Policy Implications from a New Disability and Work Reintegration Study: A Summary, Geneva: International Social Security Association, http://www.issa.int/html/pdf/publ/2wirbooklet.pdf [accessed 29.09.2014].Google Scholar
Iversen, T. and Wren, A. (1998) ‘Equality, employment, and budgetary restraint: the trilemma of the service economy’, World Politics, 50, 4, 507–46.Google Scholar
Jessop, B. (2002) The Future of the Capitalist State, Cambridge: Polity Press.Google Scholar
Johansson, H. and Hvinden, B. (2007) ‘Nordic activation reforms’, in Hvinden, B. and Johansson, H. (eds.), Citizenship in Nordic Welfare States: Dynamics of Choice, Duties and Participation in a Changing Europe, London and New York: Routledge, pp. 53–66.Google Scholar
Kvist, J., Fritzell, J., Hvinden, B. and Kangas, O. (eds.) (2012) Changing Social Equality: The Nordic Welfare Model in the 21st Century, Bristol: The Policy Press.Google Scholar
Lindbeck, A., Nyberg, S. and Weibull, J. W. (1999) ‘Social norms and economic incentives in the welfare state’, The Quarterly Journal of Economics, 114, 1, 1–35.CrossRefGoogle Scholar
Lindquist, M. J. (2005) ‘The welfare costs of union wage compression’, European Economic Review, 49, 3, 639–58.CrossRefGoogle Scholar
Low Pay Commission (2013) National Minimum Wage: Low Pay Commission Report 2013, London: The Stationery Office, http://www.lowpay.gov.uk/lowpay/report/pdf/9305-BIS-Low_Pay-Accessible6.pdf [accessed 08.07.2013].Google Scholar
Lusynian, L. and Bonato, L. (2007) ‘Work absence in Europe’, IMF Staff Papers, 54, 3, 475–538.Google Scholar
Markussen, S. (2007) ‘Trade-offs between health and absenteeism in welfare states: striking the balance’, Memorandum 19/2007, Department of Economics, University of Oslo, Oslo.Google Scholar
Moene, K. O. and Wallerstein, M. (1997) ‘Pay inequality’, Journal of Labor Economics, 15, 3, 403–30.CrossRefGoogle Scholar
Moene, K. O. and Wallerstein, M. (2005) ‘The Scandinavian model and economic development’, Development Outreach, 8, 1, 18–20, 35.Google Scholar
Molden, T. H. and Tøssebro, J. (2011) ‘Disability measurements: impacts on research results’, Scandinavian Journal of Disability Research, 14, 4, 340–57.Google Scholar
Neumark, D., Salas, J. M. I. and Wascher, W. (2013) Revisiting the Minimum Wage–Employment Debate: Throwing Out the Baby with the Bathwater?, Working Paper 18681, Cambridge, MA: National Bureau for Economic Research.Google Scholar
Norman, V. D. (2011) ‘Det norske uføret’, Dagens Næringsliv, 5 November.Google Scholar
OECD (2003) ‘Italy’, OECD Economic Surveys 2002–2003, Paris: OECD.Google Scholar
OECD (2010) Sickness, Disability and Work: Breaking the Barriers – a Synthesis of Fndings across OECD Countries, Paris: OECD.Google Scholar
OECD (2013) OECD Migration Outlook 2013, Paris: OECD, dx.doi.org/10.1787/migr_outlook-2013-en.Google Scholar
OECD (2014) OECD Employment Outlook 2014, Paris: OECD, http://www.keepeek.com/Digital-Asset-Management/oecd/employment/oecd-employment-outlook-2014_empl_outlook-2014-en#page1 [accessed 26.02.2014].Google Scholar
Pierson, P. (ed.) (2001) The New Politics of the Welfare State, Oxford: Oxford University Press.Google Scholar
Pontusson, J. (2005) Inequality and Prosperity: Social Europe vs. Liberal America, Ithaca and London: Cornell University Press.Google Scholar
Schmitt, J. and Rosnick, D. (2011) The Wage and Employment Impact of Minimum-Wage Laws in Three Cities, Washington, DC: Centre for Economic and Policy Research, http://www.cepr.net/documents/publications/min-wage-2011-03.pdf [accessed 08.07.2013].Google Scholar
Sinn, H.-W. (1999) ‘A new welfare concept’, Ifo Viewpoint no. 6, http://www.ifo.de/w/427QsS9dE [accessed 06.02.2015].Google Scholar
Spannagel, D. (2013) In-Work Poverty in Europe: Extent, Structure and Causal Mechanisms, Oldenburg: COPE, http://cope-research.eu/wp-content/uploads/2013/03/In-work_Poverty_in_Europe.pdf [accessed 02.07.2013].Google Scholar
Tanzi, V. (2002) ‘Globalization and the future of social protection’, Scottish Journal of Political Economy, 49, 1, 116–27.Google Scholar
Tanzi, V. and Schuknecht, L. (1997) ‘Reconsidering the fiscal role of government: the international perspective’, American Economic Review, 87, 2, 164–8.Google Scholar
The Economist (2013) ‘The Nordic countries: the next supermodel’, 2 February, http://www.economist.com/news/leaders/21571136-politicians-both-right-and-left-could-learn-nordic-countries-next-supermodel [accessed 18.02.2015].Google Scholar
Vedeler, J. S. (2014) ‘Disabled persons’ job interview experiences: stories of discrimination, uncertainty and recognition’, Disability and Society, 29, 4, 597–610.Google Scholar