The Gendered Effects of the Reregulation of the Swedish Welfare State

For decades the Swedish Model was taken as the model of welfare state capitalism. This model, based on a commitment to full employment, centralized wage bargaining, and the principle of universalism, raised Sweden to the position of leader in welfare state politics. However, recent threats from external factors, such as globalization and Europeanization (in the form of the European Union), and internal factors, such as the abandonment of the core principles of the Swedish Model and a turn towards neoliberalism, have led to changes in the Swedish welfare state. These changes have occasioned major debates: 1) over globalization versus internal forces; 2) over the role of the state in this process; and 3) over the Third Way in Sweden. But another debate must take place over the effects these changes have had on women, and therefore on the future of the “state feminism” strategy that, until now, has borne results for Swedish women. Policies such as publicly provided childcare, and generous parental leave and pensions systems are of particular significance to Swedish women, who entered the paid labour force in record numbers in the 1960s and 1970s. These policies allowed and even encouraged women to have both a family and a paying job. Any changes to such policies thus threaten women’s place both in the labour market and in the home or family.

Sweden is a Nordic country, with a population of nine million spread out over a large area. Many scholars speak of the “Swedish economic miracle” of the 20th century, which refers to how, in a few short decades, Sweden transformed itself from a poor agrarian country into one of the world’s most prosperous and advanced industrial nations (Swedish Institute 2003a). Today, Sweden’s major export industries include iron and steel, paper/forest products, electrical and computer equipment, and machinery. And, while Sweden has always been a capitalist country that relies on trade in a market economy, its social policy has always been much more socialist or, as Gregg Olsen refers to it, one of “nationalization of the means of consumption” (Olsen 2002: 11). This is, of course, an underlying theme of Sweden’s social democratic welfare state.

Esping-Andersen’s groundbreaking work, The Three Worlds of Welfare Capitalism (1990), introduced a typology of welfare-state regimes which serve as ideal-types around which advanced industrial nations cluster; they are ‘liberal,’ ‘conservative,’ and ‘social democratic.’ Francis Castles, among others, argues that Esping-Andersen’s typology has achieved ‘classic’ status (Castles 2001). Esping-Andersen’s ambition in coming up with this typology was to offer a “reconceptualization and re-theorization on the basis of what [he] consider[s] important about the welfare state” (1990: 2). The major difference between the three regimes is whether it is the state (social democratic), the market (liberal), or the family (conservative) that is expected to provide for most of people’s social welfare needs.

The social democratic welfare-state regime is best embodied in the Scandinavian countries, and is often typified by the Swedish welfare state, which emphasizes the role of the state to provide for its citizens’ social needs. Social democratic welfare states promote an equality of the highest standards (not of minimum need), where all people are incorporated under one universal system. In such a system, “[a]ll benefit; all are dependent; and all will presumably feel obliged to pay” (Esping-Andersen 1990: 28). This kind of regime is also committed to full employment, and concentrates on allowing both men and women to reconcile their family and work responsibilities. It is clear that the social democratic welfare states are more committed to making equality a reality than are either the liberal or the conservative welfare states, which rely on market and family, respectively, to meet their citizens’ welfare needs.

In coming up with his three welfare-state regimes, Esping-Andersen sought to identify the factors which produce these regimes; he identified three-the nature of class mobilization, class-political coalition structures, and the historical legacy of regime institutionalization. All of these factors helped to shape these three welfare-state regimes, and will also play a role in shaping their future. The historical legacy of regime institutionalization refers to the role of past reforms in establishing class preferences and political behaviour. The legacies of liberal, conser- vative, and socialist principles have become institutionalized and perpetuated in their respective welfare-state regimes over time (Esping-Andersen 1990; see also Pierson 1996).

Internal factors such as the state, industry, labour, the welfare legacy and societal norms play the most crucial role in determining policy direction; however, even these factors can be influenced or pushed forward by external factors such as globalization and Europeanization. Of course, this is not to discount the power or agency of particular people or social movements to change the path of a welfare state; it simply reveals the strength of those choices made in the past and the role they will play in future policy choices. The more neoliberal direction of Swedish state policy in the past two decades, particularly cuts to the welfare state, is actually out of step with public opinion, and could therefore lead to a crisis in representation (Ryner 1999). The welfare status quo remains very popular, and could constitute a serious obstacle to any reform (Esping-Andersen 2002a). As mentioned earlier, each nation has its own distinct welfare policy legacy and it would be very difficult, and politically damaging, to break from that legacy altogether.

Cross-national variations in the content of welfare states remain, despite powerful and similar domestic and external forces facing all nations. Olsen (2002) argues that a combination of Sweden’s powerful labour movement, its more collectivist and statist values, and its more unified state structure have left it less vulnerable to these pressures; hence, welfare ‘retrenchment’ has been less severe in Sweden, and levels of poverty and inequality remain substantially lower in Sweden than elsewhere. The domestic conditions in each nation may serve to protect the national welfare state from external pressures, such as globalization, to some degree. The existence of a specific set of domestic conditions within each nation comes from decades, and even centuries, of social and cultural values being embedded within a particular political structure. New forces may challenge such values and structures, but their mere existence will filter how the challenge will be met.

Sweden’s emphasis on the state and on publicly provided social services dates back to the development of ‘the People’s Home,’ a metaphor for the supportive social democratic state (Daune-Richard & Mahon 2001). In the early 20th century, the concept of the ‘People’s Home’ was developed to encompass the ideals of social democracy, including equality, full employment, and a comprehensive welfare state. This notion of the People’s Home was developed by the Social Democratic Party (SAP), in coalition with farmer organizations (Esping-Andersen 1990), which proved to be a fruitful coalition for the development of the Swedish welfare state. The development of the People’s Home has also been crucial to incorporating women and their concerns into the political agenda, as it enabled women to enter the paid labour force in large numbers in the 1960s and 1970s.

Of course, the People’s Home had to some degree relied on women’s labour since its inception in the 1930s, allowing Sweden to avoid importing immigrant labour until much later. Indeed, concern arose already in the ’30s with balancing women’s place in the public sphere with family life. Alva and Gunnar Myrdal’s The Crisis in the Population Question (1934) attempted to determine why fertility rates had been declining since the beginning of the 20th century. And while many, perhaps rightfully, argue that this reflects underlying racism within Swedish society, it is clear that importing immigrant labour also has racist implications, as well as sexist ones for those countries that would prefer to employ immigrants rather than their own female citizens. In other nations, immigrants were typically employed in low-paying, insecure jobs with little room for improvement. However, in the Swedish case, Swedish women entered similar types of employment with relatively high pay and benefits and much more control over balancing their work and family lives. As Daune-Richard and Mahon (2001) argue, the Swedish welfare state supported women’s employment both by providing necessary services like childcare, and by creating jobs in the public sector that employed women.

Two crucial elements of the People’s Home, the principles of centralized wage bargaining and solidaristic wages policy, were entrenched in the 1938 Saltsjobaden Basic Agreement between labour, the Swedish Confederation of Trade Unions (LO), and capital, the Swedish Employers Association (SAF). The commitment to a comprehensive welfare state was entrenched in this historic compromise (Olsen 2002), whereby the LO and the SAF would negotiate a collective agreement that would be implemented by member unions and associations. Solidaristic wages policy, an important part of Sweden’s corporatist arrangement, guaranteed “equalization of income across jobs, sectors and employers” (Clement 1994: 100). This agreement was closely tied to Sweden’s commitment to full employment, which remained a high priority from the late 1930s to the early 1990s, being guaranteed through the Swedish welfare state (Jenson & Sineau 2001a). In fact, only Sweden and Norway, were able to translate this commitment into reality for most of the post-war period (Esping-Andersen 1990). Until the 1980s, open unemployment in both countries was under 3%, exceeding this benchmark only three times from 1950-1991 (Olsen 2002). This figure is even more remarkable in the Swedish case, when one considers the high levels of female participation in the labour force. By the early 1990s, women constituted 48% of the Swedish labour force (ibid.), the highest percentage anywhere in the world.

The Swedish version of full employment was unique, particularly due to two interrelated factors: high rates of women’s employment, and high levels of employment in the public sector. The Swedish version of full employment relied on most people working most of the time in order to support the system (Myles 1994). The major mechanism used by the state to ensure this high employment, and high wages, was employment inside the welfare state. Such a system created wage pressure that forced out less efficient, low-wage jobs, resulting in fewer ‘working poor’ and a larger middle-income group. Also, under Swedish full employment, those who do not work, such as the elderly, can be provided with high incomes through the income security system, as there are enough people in the labour force to support such a system.

Sweden’s strong, unified labour movement, pursuing solidaristic wage bargaining, was the driving force behind maintaining the country’s commitment to full employment (Esping-Andersen 1990; Myles 1994). The Swedish system of full employment was based on the Rehn-Meidner model (developed by two union economists, Gosta Rehn and Rudolf Meidner), which advocated the use of active labour market policies (ALMPs) within a context of economic growth (Esping-Andersen 1990). Unlike most nations, Sweden always spent more money on ALMPs than on passive and reactive measures such as unemployment insurance. These active policies include retraining programs, job placement and mobility grants for workers, substantial subsidies to encourage employers to hire the long-term unemployed, and temporary, government-sponsored job creation programs (Olsen 1999).

These policies, which allowed the state to channel labour into sectors of the economy where supply was short, and to increase demand wherever there was an excess supply, became the instru- ment through which full employment was pursued and achieved in the mid-20th century. Over time, the Swedish welfare state became the leading force in sustaining full employment, partly as direct employer, and partly through subsidies. The state even went so far as to accumulate large deficits to finance public sector employment (Esping-Andersen, 1990). This demonstrates the strength of the state’s commitment to full employment.

The Swedish welfare state has been relatively unique in its development of policies that encourage women to have both a family and paid employment. Parental leave policies, the reduced working day, and the opportunities and choices available to both parents play a significant role when it comes to balancing paid employment and family (Eduards 1989). Jenson and Sineau agree, citing the close link between childcare and employment policies in Sweden as an expression of the state’s commitment to gender equality in the labour force (Jenson & Sineau 2002b; see also Winkler 2002). Esping-Andersen, too, argues for the importance of care services in enabling women to have children and careers, and cautions about the possible effects of a current challenge to welfare state policy (2002a).

Most Swedish women take advantage of the existing woman- friendly policies and opt for both lifetime employment- with few or no interruptions-and motherhood (Esping-Andersen 2002b). This reflects the range of services available to both men and women in balancing work and family life: services which not only facilitate women’s entry (and continuation) in the labour market, but also encourage fathers to assume greater responsibility for childcare and household duties. The tax system, too, provides an incentive for both men and women to work outside of the home, as men and women are taxed individually in Sweden (Esping-Andersen 1990).

Throughout the 1970s and 1980s, the public sector expanded so rapidly that it accounted for the overwhelming majority of new jobs, most of which were filled by women (Esping-Andersen 1990). In the mid-1990s, approximately 57% of Swedes were clients of a major social program or employed in the public sector, which demonstrates a strong reliance upon public sector services, either directly or indirectly (Pierson 2001). However, with the parallel expansion of the welfare state and women’s entry into the labour force, what has occurred in Sweden is a feminization of the welfare state. For example, in the 1980s, the public sector accounted for 80% of new jobs, with 75% of these being female (Esping-Andersen 1990). The expansion of the welfare state was actually only possible through the recruitment of women to part-time employment (Ryner 1999). Yet, part-time jobs in Sweden are not necessarily the same as part-time jobs in other parts of the industrialized world, as they are highly unionized, are accompanied by relatively high wages, and allow women flexibility in their work hours.

The Swedish Model, or the People’s Home, saw increased expansion during the 1960s and 1970s, in a context of full employment, increasing female participation in the labour force, and the extension of woman-friendly welfare state policies. In part, this expansion was possible due to the SAP’s ability to adapt and form new coalitions with different sectors of society. As mentioned above, the notion of the People’s Home was developed by the SAP in coalition with farmer organizations; however, later, in the middle of the century, the traditional working class turned to the emerging white-collar sectors to form a coalition in support of the welfare state. This coalition saw the beginning of a welfare state which combined universal entitlements with high earnings-graduated benefits (Esping-Andersen 1990, Clement & Mahon 1994), thus becoming a welfare state supported by the vast majority of the population. By creating a two-tiered welfare state, the higher-paid service-sector workers became “wedded to its defense” and guarded against backlash (Esping-Andersen 1990: 69). And the future of the Swedish welfare state depends on middle-class support, which is why the welfare state still remained committed to expanding and improving services throughout the 1980s and early ’90s.

The first tier of the Swedish welfare state ensures the basic security of all long-term residents through universal, flat-rate benefits. In this way, universalism promotes equality, as all citizens have similar rights, and this cultivates cross-class solidarity (Esping-Andersen 1990). The social democratic welfare state incorporates all citizens under one universal insurance system, but the fact that there is a second tier of graduated benefits has helped to sustain the welfare state. This second tier provides earnings-related social insurance benefits to those in the labour force, which has helped the welfare state to grow and expand during the 1970s and ’80s, as there was tremendous support for public welfare. The expansion of the welfare state also helped to discourage the growth of any (or many) private alternatives during this time (Olsen 2002). Under these conditions, generous social service programs such as child and elder care, parental leave, sickness insurance, disability benefits, and pensions were able to flourish. Indeed, many of these programs became world leaders for their generous benefit levels, their universality, and duration of benefits.

The Swedish case, in particular, shows how important pro-natalist concerns can be for the development of woman-friendly policies such as childcare and parental leave. These gender equality policies are needed in order to avoid severe labour shortages or a shortage of births (Esping-Andersen 2002a). Sweden’s emphasis on encouraging women to enter the labour market created such conditions. Indeed, all employment growth in Sweden from the 1960s to the 1990s was in the local public sector, and almost all of it has been by women (Rosen 1996). This has meant that more women participated in the paid labour force in Sweden than in any other nation (Sundstrom & Stafford 1992). In fact, there was near maximum employment among women and men for many years in Sweden (Hemerijck 2002). The result of this increase in women’s employment was falling birthrates, and subsequent concern about population policy (Daune-Richard & Mahon 2001).

Concern with falling birthrates as women entered the paid labour force was clearly an important factor in the development and expansion of the public childcare program, for which the leading advocate, from the mid-’60s, was the LO (Daune-Richard & Mahon 2001). Thanks to the LO’s strong ties to the SAP, childcare was given high priority, and the number of publicly provided municipal childcare centers increased from under 12,000 in 1965 to over 136,000 in 1980 (Curtin 1999, Daune-Richard & Mahon 2001, Mahon 1999). This was partly the result of lobbying by key women in the trade-union and political spheres, as well as the state’s own agenda. The Swedish welfare state recognized access to reliable childcare as a basic requirement of a society in which both parents normally work outside of the home.

In Sweden the municipalities have traditionally been responsible for most publicly provided childcare. This responsibility increased dramatically in the 1970s and ’80s. This increase was, in part, a response to a 1975 plan adopted by the Swedish parliament to address the problems of working mothers (Kelber 1994). During the 1980s, after their return to power, the Social Democrats promised a day care spot for all children over eighteen months; they also banned all private for-profit day care centers and regulated other non-public day care centers (Mahon 1999). Public funds continued to be poured into the expansion of the childcare system throughout the decade (Daune-Richard & Mahon 2001). Sweden’s public childcare system was financed by the state, the municipality, and minimal parental fees, which were based on income and the number of siblings in a family (Daniels 1992). These policies decreased women’s economic dependence upon men, making it easier for them to resume work after their parental leave benefits ended (Sundstrom & Stafford 1992).

Closely tied to publicly provided childcare is the generous paid parental leave system in Sweden. This parental leave system gives mothers and fathers paid leave from work, to take care of small or newborn children. It recognizes the best interest of the child, to have both parents involved in child rearing (Cook, Lorwin & Daniels 1992). The SAP adopted parental leave at its 1972 congress, and it became law in 1974, replacing the old maternity leave, which focused solely on mothers (Daune-Richard & Mahon 2001). Several pieces of legislation were passed on the subject of parental leave under the bourgeois coalition of 1976-1982. For example, in 1978 parental leave was extended to nine months, with the last three paid at a flat rate; alternatively, the additional three months could be used to reduce the workday for one parent. Also in 1978, legislation made it illegal to deny parental leave until a child is eighteen months old, or to refuse the reduction of a parent’s workday to six hours until the youngest child is eight years old (Daune-Richard & Mahon 2001). At its peak, Sweden’s parental leave policy offered both parents the option of 64 weeks at 90% pay for the first year and a flat rate for the remaining 12 weeks (Williams Walsh 1997). Parents could use these benefits in different ways up until the child’s eighth birthday.

During the 1976 election campaign, the SAP made a commitment to introduce a ‘father’s month’ of parental leave; however, the SAP was defeated. The father’s month was eventually introduced in the bill Shared Power-Shared Responsibility in 1991 by the Liberals, in the bourgeois coalition of 1991-1994 (Daune-Richard & Mahon 2001). The late 1980s and early ’90s also saw an increase in the number of fathers taking leave and the length of leave being taken. For example, in 1980, 29.6% of fathers with children under the age of two took parental leave of an average of 45 days; by 1992, 48.3% of fathers took an average of 63 days (ibid.). However, as Esping-Andersen (2002b) points out, fathers taking advantage of parental leave are generally those married to highly educated women or those working within the public sector. And, even then, the male share of the total leave remains modest, even if it is on the rise.

The expansion of the Swedish welfare state throughout the 1960s and 1970s was critical to the creation of such a mature and advanced welfare regime. However, this whole system has come under severe challenge since the late 1970s, as an increasing number of multinational firms have emerged in Sweden, leading to increased pressure to “internationalize” (Clement 1994). Companies such as Volvo and Skanska used to rely on the Swedish state, through the corporatist bargaining structure, but since the mid-’80s they have pushed for an acceleration of corporate concentration. The state’s response was to try to hold onto national investment while at the same time attracting foreign investment.

In the mid-1980s the government liberalized the economy by undercutting the power of the strong Swedish labour movement, and dismantling the instruments of the active labour market policy (Clement 1994). The SAF played a key role in this new policy direction of Swedish political economy. Its interests lay in undercutting the power of the labour movement by allowing for greater unemployment. The SAF’s strategy to end solidaristic wages policy threatened the gains made in the past, which had led to a “significant leveling of wage differentials, across industries and across sex” (Jenson & Mahon 1993). The SAF’s goal was to break up the Swedish Model; its 1990 plan, “Free Markets and Free Choice: SAF’s Vision for the Nineties,” saw the end of centralized bargaining and corporatist bodies, deregulation of capital and financial markets, reduction of (already low) corporate taxes, and the introduction of private alternatives to public social services (Olsen 1999). The impact of globalization was to strengthen links between Swedish firms and the “global community.” As a result, the corporatist structure of Sweden’s centralized bargaining system came under threat, and all the elements of the postwar compromise were called into question-from the public commitment to full employment to the active labour market policies, solidaristic bargaining, a social security system built on the replacement principle, and the commitment to high quality and comprehensive public services (Jenson & Sineau 2001a).

The SAF’s strategy of dismantling centralized wage bargaining was only one part of a broader “employer offensive” (Pontusson 1987). The Association of Engineering Employers (VF), the largest SAF affiliate, pushed for the decentralization of wage-setting and for overall change which would lead to greater employer flexibility, particularly in industries open to international competition, like engineering. Other SAF affiliates such as the Commercial Employers’ Association (HAO) and the Forest Products Association, however, were opposed to decentralization and advocated strong central negotiations (Pontusson & Swenson 1996). This created tension within the SAF, which helps to explain why the VF’s proposals for change were not initially implemented. It actually took many years before the VF was successful in pushing for the decentralization of wage bargaining.

This offensive, which began in the 1970s, also included an attack on the proposal for wage-earner funds put forward by the LO in 1976. This proposal was part of a “labour offensive” launched in the 1960s which pushed for “greater public influence over corporate investment decisions and worker influence over workplace conditions” (Pontusson 1987). It envisaged a profit-sharing arrangement leading to a transfer of ownership from private hands to newly created funds representing wage-earners as a collective. However, due to divisions within the LO, between the LO and the SAP, between the LO and the public sector unions, and between labour and business, the wage-earner funds were ultimately a failure. The SAF launched a massive media campaign against these funds, in which they spent more money than all five parliamentary parties spent together on the 1982 election campaign (ibid.). The results of this employer offensive were numerous, including a new neoliberal direction for Swedish social policy as well as for business-labour relations. The subsequent weakening of the labour movement and, thus, the Social Democratic Party, has real implications for the Swedish welfare state, and for Swedish women, as will be explored below.

Challenges to the Swedish welfare state have also come from Europeanization, through the European Union (EU). Like the North America Free Trade Agreement (NAFTA), the EU allows countries to become members only upon meeting an evolving set of economic requirements. In order for Sweden to join the EU in 1994 it needed to satisfy the Maastricht convergence criteria, which represented a shift of the EU from being solely a regional trading bloc toward being a broader economic and monetary union. This required reducing Sweden’s fiscal deficit through cuts in social expenditures (Turner & Whitehead 2002; Clayton & Pontusson 1996), thereby threatening the country’s egalitarian welfare state policies in order to meet fiscal and budgetary constraints imposed by European monetary integration (Hemerijck 2002). This transfer of power from governments to unelected, unaccountable bodies and institutions, such as those of the EU,1 threatens citizens’, and particularly women’s, rights (Beneria & Lind 1995). This is particularly true in a nation like Sweden where women have worked very hard and have achieved success in increasing their representation at the local, regional, and national levels of politics.

Indeed, Sweden’s decision to apply to the EU in 1990 was accompanied by the formal abandonment of the commitment to full employment, which was one of the factors that led to the fragmentation of Sweden’s centralized wage bargaining system (Ryner 1999). Applying for EU membership and the subsequent referendum were very controversial in Sweden.2 Any convergence among policies could actually lead to a weakening of the Swedish welfare state. An example of this is the move towards ‘Third Way’ reforms in many European nations (on which see below); there is a fear that this could lead to “a coordinated joint effort at finding solutions” (Esping-Andersen 2002b: 18), in which the most advanced welfare policies would be at risk.

The breakdown of the postwar compromise had led to ‘fiscal decentralization’ and a reregulation of the Swedish welfare state. Since the 1980s central transfers to local governments have been reduced and are now in the form of block grants, giving local governments increased freedom to choose where to spend limited resources. The ‘increased autonomy’ of local governments has led to a focus on competition and privatization in order to deal with fewer resources and an increased demand (due to an increase in the number of unemployed Swedes). The result of this new focus is that local governments are no longer providers, but are now purchasers, of services; local governments are contracting out to private entrepreneurs and providing citizens with vouchers to ‘purchase’ their own services. All of this has meant a weakening of the principle of universalism, which was one of the core principles of the Swedish welfare state (Jenson & Sineau 2001a). Social democracy’s long-standing preference for collective solutions stems from the fear that market and family alternatives offer insufficient security and result in the unequal provision of services (Esping-Andersen 2002a). The move away from universalism has been accompanied by a simultaneous move towards a new individualism (Daune-Richard & Mahon 2001). And as will be seen below in the discussion of childcare, this new individualism manifests itself in a discussion of ‘choice’ and a weakening of universal policies.

Another area of the Swedish welfare state which has been reregulated and whose reregulation has had a very negative impact on women is the pension system. Sweden’s unprecedented old-age pension, or income-security system has been completely overhauled in the past decade, due to the problem of sustaining post-war pension commitments (Esping-Andersen 2002a). Prior to the changes, Sweden had a three-tier pension system-(1) the folkpension (FP), which was a basic flat-rate, universally provided pension to all those 65 years of age or older; (2) a national supplementary pension, or ATP, which was determined by one’s pre-retirement income; and (3) a national supplementary occupational pension. This comprehensive system provided, in total, approximately 75% of one’s gross pre-retirement income (Olsen 1999). The generous old age security system in Sweden minimized poverty of the aged (Esping-Andersen 2002a), which was an important part of the Swedish welfare state’s attempt to minimize overall poverty. The Swedish pension system was considered one of the best in the world, until it was overhauled in the late 1990s. Luckily the maturity of the system, like that of the entire welfare state system, made radical privatization virtually impossible (Andersen 2001). However, Esping-Andersen argues that an adequate retirement guarantee must be a part of any social model (Esping-Andersen 2002a), and this appears to be faltering in Sweden.

The new pension system eliminates much of the equality and universality of the previous system. The FP is no longer universally received; only those whose ATP benefits are minimal to none now receive the folkpension. In addition, the ATP has been changed so that now employers and employees make equal contributions, thus favoring those who have a long, steady record of employment (Olsen 1999). Also, ATP benefits will be based on lifetime earnings rather than the best 15 out of 30 years, as was the previous practice (Andersen 2001). The impact this new system will have on women is clear. The National Insurance Board conducted a study of the new system and concluded that women who work fewer than 40 years would be losers in the new system (ibid.). It is clear that men and women face different life-course risks due to their sex and their relations to one another. This, of course, means that women are disproportionately affected by reforms that reduce or reorganize public sector benefits, since they typically have lower lifetime earnings (Myles 2002).

Many of the challenges to the Swedish welfare state were intensified in the early 1990s when Sweden began to experience record unemployment. This was cause for concern in a country that had maintained an average of 2.4% unemployment since the 1960s (Olsen 1999). Abandoning full employment as the primary economic policy goal meant that unemployment rates jumped from 2.1% in 1990 to 12.5% in 1993 (Daune-Richard & Mahon 2001). Olsen explains the reasons for this jump in unemployment as “national and global recessions” and a “consequent decrease in the demand for labour,” which led the state to focus on reducing inflation, not unemployment (1999: 248). For the first time since it was developed in the 1950s, the Rehn-Meidner model was abandoned and full employment was no longer the most important priority for the Swedish state.

Growing unemployment in the 1990s has brought another decrease in fertility rates in Sweden. In the first seven years of the 1990s, fertility rates decreased from 2.1 to 1.6 children per woman in childbearing years, reflecting increased joblessness, falling incomes, and uncertainty about the future (Esping-Andersen 2002b). This reflects a new phase in Swedish politics where women’s unemployment results in falling birthrates. A reevaluation of woman-friendly policies is called for, as it has become clear that childcare and parental leave alone are not enough if women are involuntarily unemployed. The 1990s saw the elimination of almost 100,000 welfare state jobs, which are largely women’s jobs (ibid.). A response to women’s increased unemployment would include an expansion of the welfare state and the public sector, once again. The Nordic social democratic welfare states have become the female labour market, providing well-paying, secure, and flexible employment. In addition, the public sector is more likely to offer quality part-time employment options, which many women choose in order to balance family and paid employment. Therefore, cuts to the welfare state and an increase in privatization mean a number of things for Swedish women-that there are simply fewer job- openings, and that many of these are now in the private service sector and pay less and are less secure and flexible.

The role of the state in Sweden has always been of great importance. Swedes look to the state for support in many areas of life-from childcare to unemployment insurance, training programs to health care, housing subsidies to pensions. Welfare states generally are based on a division of responsibilities between three interdependent pillars-market, family, and state; the Swedish Model is unique in its emphasis on the state pillar (Esping-Andersen 2002a). This fits very well into Steven Vogel’s understanding of reregulation and his focus on state institutions in the process of regulatory reform (Vogel 1996). It is true that the division of responsibilities in the Swedish welfare state may have been rearranged in the past twenty years, but it does not mean that the state has any less power or regulatory control. Instead, what we find is what Vogel named his 1996 book on reregulation-freer markets, more rules. Through this process of reregulation there has been a strengthening of both markets and states. Thus, “the role of the state has not necessarily been diminished” (Panitch 1994: 63). The relationship of the state to the economy has, in many ways, been restructured, but the state maintains its role as regulator of private actors (Panitch 1998).

Choice is part of the reregulation process whereby citizens are given the ‘choice’ to purchase their services from a variety of providers, rather than the state publicly providing these services (and a certain level of quality and equality). However, this process of privatization of services does not necessarily imply a withdrawal of the state. As the Swedish case demonstrates, the state is still very much involved, but often in new and different ways. As already mentioned, municipalities are increasingly contracting out their childcare services and providing vouchers to citizens with which to ‘purchase’ them; however, this system is still regulated by the state and the state retains control over the services and levels of funding to service providers.

The discourse of deregulation obscures the reality of the situation because it implies that governments are relinquishing regulatory power. In fact, what has taken place is actually ‘reregulation,’ or a reformation of old rules and the creation of new ones (Vogel 1996). Thus, governments have reorganized their control of the private sector, but without substantially reducing the level of regulation. The discourse of deregulation underestimates the role of the state in choosing which path to pursue and which priorities to emphasize. Evidence of this state power lies in the fact that states have responded to similar pressures in markedly different ways, which illustrates how states have a choice in how to respond to both external and internal pressures. Rather than being passive subjects in regulation, state institutions are actually active agents driving the reform process. The particular ideas and institutions which make up a state determine the specificities of reregulation in a given context. This relates to Vogel’s conception of the relative autonomy of the state, which is comprised of “specific ideological biases and institutional capabilities” (1996: 268). Vogel argues that the interest of the state, or the public interest, only partially transcends the interests of societal groups, or private interests. This is what we must consider when looking at the case of Sweden. With all the changes that have taken place, there is not less regulation; the state is still in control of all public services, and the newer private services face regulation from the state in order to qualify for grants or subsidies. Thus, the state has control over what is being privatized and what will remain public, as well as over the forms these services will take. As Gregg Olsen argues, “the Swedish welfare state has not been ‘dismantled,’ it has undergone a series of critical modifications” (Olsen 1999: 242). The Swedish welfare state is still alive and in much better shape than welfare states elsewhere in the world, even if it is not as healthy as it once was. And, it is this fact that offers hope of reversing recent trends.

The state remains an important actor in determining the direction of future social policy, and thus remains an important site of resistance and organizing. This is of particular importance for those who call for an international focus to organizing; as Panitch argues, such international struggles must be supplements (not alternatives) to national struggles (Panitch 1994). . To understand how Swedish women are both affected by and resisting recent changes to the welfare state, it is crucial to understand the state feminist strategy pursued by Swedish women since the 1960s, and to determine whether this strategy will remain relevant in the current context.

There are a variety of different kinds of feminist intervention in the state, from individual feminists entering the bureaucracy or running for political office, to creating new structures and new legislation (Eisenstein 1990). The key question is one of strategy in a particular context. In Sweden women have pursued all of the above-mentioned strategies with varying degrees of success. Individual women running for political office has been the focus of much attention because of the exceptional number of women in parliament in Sweden compared to other countries. Currently, women make up 45.3% of the representatives in the Swedish parliament, or Riksdag (Inter-Parliamentary Union 2003), the highest percentage anywhere in the world. State feminism generally refers to the public policy machinery put in place to deal with women’s issues (Eisenstein 1996). Sweden’s version of state feminism has meant the incorporation of women and their concerns directly into the institutions and policies of the political system. Those women who are politically active have, in large part, become so through membership in the women’s sections of political parties or in unions, and not through independent grassroots organizing. Most feminists in Sweden work towards their goals within governmental bureaucracies or within political parties (Elman 1996).

However, there has always been concern with the limitations of a strategy of state feminism. For the most part these fears were not taken seriously in Sweden, unlike in many nations, due to the fact that women’s incorporation into the state, and the strong welfare state, were a success for many decades. However, the inherent skepticism, on the part of many feminists,3 in working with the state, has become an issue in Sweden with the recent attacks on the welfare state and on women’s equality. The possibility of a ‘woman-friendly’ state is thus put in doubt, as the fear of co-optation is ever-present. This leads to questions such as, “have feminist demands been diluted or co-opted through engagement with the institutions and discourses which constitute the state?” (Watson 1990) A growing concern arises that the state’s agenda is actually quite different from a feminist agenda. However, Swedish women remain committed to a state-oriented strategy, as can be seen in the feminist organizing which took place between the 1991 and 1994 national elections.

The 1991 election saw many surprising outcomes-the Social Democratic Party lost for the only the second time in over half a century, and the proportion of women in the Riksdag fell for the first time in 63 years. In addition, a real gender gap emerged, with women overwhelmingly supporting the SAP and the Liberals, and men (particularly young men) supporting parties to the right (Daune-Richard & Mahon 2001). These results led many women to question the direction of Swedish politics. The decrease in the proportion of women in the Riksdag, from 38% to 33%, or 132 to 115 representatives (Jenson & Mahon 1993), led many women to be concerned that the results signaled a move away from welfare politics (Burness 1999). These concerned women formed a group which became known as the ‘Support Stockings.’ They hoped to protect the gains that women had made, which they saw threatened by recent cuts in welfare state programs and in public sector employment (Bergman 1999).

The aim of the Support Stockings was to reverse the electoral losses of 1991 by 1994. The name of the group was a tribute to past women’s organizations, the Blue Stockings in the 19th century, and the Red Stockings in the 1970s; it also had a “down-to-earth, middle-aged, non-glamorous appeal” (Burness 1999). In order to guarantee cooperation from the parties and the entire political party system, the Support Stockings threatened to form a women’s political party, which was not their aim but was viewed as a last resort if cooperation was not secured. They were successful in securing cooperation and in making women’s political representation an important issue in 1994-a difficult feat in a political atmosphere dominated by talk of unemployment and restructuring. The 1994 election saw the return of the SAP, and the proportion of women in parliament increased to 40.4%, or 141 representatives, with equal numbers of men and women in the cabinet (ibid.). Like many women’s organizations in Sweden, the Support Stockings were focused on the state as a site of organizing; and once their goals were met, the network disappeared, and many of the women involved were absorbed into the government (Daune-Richard & Mahon 2001). As discussed above, this is typical of the Swedish version of state feminism which emerged in the 1960s.

The example of the Support Stockings demonstrates how political processes could have gendered effects. As Isa Bakker argues, restructuring is not a gender-neutral macro-economic process (Bakker 1996). The reregulation of the Swedish welfare state, and the consequent cuts in social spending and the privatization of services, have very different effects on men and women. The costs of these cuts are borne disproportionately by the most vulnerable people in society-the poor and women, particularly single mothers (UN Secretary-General 1999, Brodie 1996). Restructuring increases women’s economic insecurity as well as their unpaid work. In this way women’s workload increases while their economic independence decreases; they become more dependent on men or the state for their survival.

Sweden’s move towards privatization and away from universalism is best encapsulated in the case of childcare. Beginning in the 1980s, there were increased demands for private initiatives for for-profit childcare. One example is the SAF’s and the Swedish Federation of Industries’ proposal for a private day-care company, Pysslingen; in response, the SAP passed the Lex Pysslingen legislation, which banned all private for-profit day care, and regulated the growth of other non-public forms (Daune-Richard & Mahon 2001). The SAP’s4 concern regarding for-profit childcare was that it would turn municipal institutions into ghettos for children of the low-paid or children with special needs, thus breaking with the universal principle of the Swedish welfare state. However, when the SAP was defeated in the 1991 election, the ruling coalition abolished Lex Pysslingen, and the Social Democrats did not reinstate it when they returned to office in 1994, as their primary concern remained Sweden’s economic situation. The consequence is that for-profit childcare centers are now allowed in Sweden, although they must follow the same rules as public centers in order to receive municipal subsidies (ibid.).

This is a clear instance of reregulation, not deregulation, since the state still retains control over regulation of childcare, although now through private for-profit, as well as publicly provided services. Since the early 1990s, the popularity of private childcare has increased. In 1991 only 2.5% of the total childcare workforce was employed in private childcare; by 1997, this had risen to 9.2% (Daune-Richard & Mahon 2001). This increase in the popularity of private, publicly funded, childcare services has meant that about 10% of all spaces in childcare centers are now privately provided (Jenson & Sineau 2002b). Also, recently the state has reduced the replacement percentage for parental insurance from 90% to 80% (Clayton & Pontusson 1998), making it more onerous for the higher-waged parent (generally the father) to take advantage of the leave. This means that parental leave will be taken even more disproportionately by women, which has real consequences for the sexual division of labour, particularly in relation to childcare.

In addition, public childcare funding has been cut over the past decade. Conservative Prime Minister Carl Bildt (1991-1994) actually rolled national subsidies for childcare into a general block grant to municipalities, while publicly stating his government’s commitment to provide childcare places for all children of working parents (Daune-Richard & Mahon 2001). When the SAP returned to office in 1994, they did nothing to immediately improve this situation as their focus was on the economic crisis. However, once the economic situation improved, the SAP increased the transfers to municipalities to restore the standard of childcare through a program called the “Persson funds” (Mahon 2000). Still, the proportion of childcare paid for by the central government is declining, and municipalities are being forced to find solutions with fewer resources available to them. One possible solution being pursued is an increase in the traditionally small parental contributions, which disproportionately affects the poor and women. This means that more and more women will be faced with the possibility of not being able to afford to work in paid employment as their childcare expenses increase. All of this is underlined by a state increasingly focused on ‘choice,’ a clear indication of a shift in direction. Parents are now able to ‘choose’ among a variety of childcare services for their children. However, this means that some will be left with little or no choice due to lack of access or affordability, which means that the principle of universalism has been totally abandoned in the childcare system.

Coming back to the three debates mentioned at the beginning of this paper, a discussion of globalization is required in order to set the context. For my present purposes, I view globalization as a complex of forces emerging in the mid-1970s that includes “the reach of American imperialism, the power of financial markets, the spread of capitalist social relations, the intensification of exploitation, and a vast growth in social inequality” (Panitch 2001: 367; see also Cox 1997). Much of the literature on globalization views it as an inevitable, unstoppable force that we, as citizens and states, must accept and adapt to. This view leaves no room for agency or resistance. Rianne Mahon (2000) challenges this conception of globalization as unstoppable with one that encompasses room for resistance. The view of globalization as inevitable also does not reflect the state’s role in authoring globalization (Panitch 1994, 1998, & 2001). Janine Brodie goes so far as to state that “governments are effectively acting as the midwives of globalization” (1996: 5). Paul Hirst and Grahame Thompson (1999) also argue that this view of globalization as an unstoppable force is a myth. When looking at the particular case of Sweden it is clear that the state has played a significant role in the reregulation of the welfare state; thus, the state is not passively losing power or having to adapt, but is actively engaged in the process of reregulation. It is for this reason that any strategy to challenge globalization must focus on the level of the nation-state, and not solely on the international level of politics (Panitch 2001).

The first debate, then, looks at which factors have caused the changes to the Swedish Model-the external, or international pressures from globalization and Europeanization, or domestic pressures, particularly coming from the Swedish Employers Association. With reference to Sweden, the collapse or dismantling of the welfare state is generally discussed in terms of globalization. However, many of the challenges to the welfare state have been launched internally. Mahon (2000) argues that the real limits to full employment and equality are political, and do not stem from globalization. Ryner (1999) also argues that while globalization is central to the Swedish crisis, the crisis cannot be reduced to globalization, as there are both domestic and global political forces at work. The domestic factors, supported by the global political and economic environment, include the abandonment of the Rehn-Meidner commitment to full employment and centralized wage bargaining, as well as a move away from the principle of universalism, all of which were pushed by the increasingly neoliberal agenda of the Swedish Employers Association (SAF). It is clear, then, that this debate sets up a false dichotomy, for it is really a combination of internal and external forces that has led to the changes. External forces simply reinforce those internal actors who are pushing for a more neoliberal agenda.

The second debate focuses on whether the changes in the Swedish Model have constituted a deregulation or a reregulation of the Swedish welfare state. One’s opinion on this topic is based on one’s view of the role and power of the state in this process of regulatory reform. Many scholars (e.g., Huber & Stephens 1998) believe that what has taken place in Sweden is deregulation. They view the privatization of social services and the cuts to social spending as signs of deregulation, of a weakened state or weakened state control over the private sector. However, such a view underestimates the role of the state in choosing which path to pursue and which priorities to emphasize. As discussed earlier, Vogel argues that what has occurred constitutes a reregulation of the welfare state, with the state maintaining regulatory control, even if it chooses to privatize certain services that were previously public. It is clear that this is a much more accurate picture of what is taking place in Sweden, since those changes which have occurred have not led to a dismantling of the welfare state or of its crucial components, but constitute a series of modifications that could be reversed.

The third debate centers around Sweden’s relationship to ‘the Third Way,’ which is rather contested. Scholars such as Gosta Esping-Andersen and Magnus Ryner argue that traditional Swedish social democratic policy was never too far from the Third Way, and Anne-Marie Daune-Richard, Rianne Mahon, and Jonas Pontusson argue that it was the pursuit of a new set of Third Way policies that led to the crisis in the Swedish Model, by breaking with the core principles of the Rehn-Meidner model. Esping-Andersen (2002a) argues that the Third Way of the 1990s was popular because it retained the more credible aspects of neoliberalism (such as individual responsibility), but fused them with public responsibility. The emphasis on training and lifelong learning (familiar practices in Sweden) was intended to empower citizens to meet their welfare needs through the market, not the state. Esping-Andersen goes on to suggest that the British Third Way is nothing more than a (late) discovery of Nordic social democracy. Ryner (1999) also argues that the SAP’s ‘Third Way’ economic policy in the 1980s was a return to traditional Social Democratic politics, albeit a failed one.

This view of the Third Way as ‘Nordic social democracy’ or traditional social democratic politics contrasts dramatically with Daune-Richard & Mahon’s view of Sweden and the ‘Third Road.’ For them the Third Road of the 1980s broke with the Rehn-Meidner model by looking to high profits to restore growth. This Third Road was “a course between Thatcher’s monetarism and the early Mitterrand government’s misguided return to Keynesianism,” and focused on the aggressive devaluation of the krona (the Swedish currency) (2001: 173-174). The Third Road also helped to support the Swedish Employers Association’s commitment to destroy coordinated bargaining and solidaristic wages. Indeed, Jonas Pontusson (1987) also declares the Social Democrats’ recovery strategy of the 1980s as Third Way. He argues that the Third Way in Sweden dates back to 1982, not before, thus rejecting Esping-Andersen’s and Ryner’s arguments that Sweden has always followed a Third Way approach.

Whichever conception one agrees with, the common theme is that the Third Way is presented as a kinder version of neoliberalism, one that fits best with Sweden’s vision of welfare state politics. However, Daune-Richard & Mahon, and Pontusson make a compelling argument that the Third Way in Sweden does represent a shift in policy direction. This shift is away from universalism and towards individualism, away from full employment and towards ‘economic growth,’ and away from centralized wage bargaining and towards decentralization. The shift towards a discourse of ‘choice’ within childcare, in particular, is a clear demonstration that this move is a relatively new direction for the Swedish Model. As Panitch argues (2000: 18), there has been a gradual shift “in the ideological rubric of globalization from neoliberalism to the ‘third way.'” The Third Way is presented as more in keeping with social democratic tenets than neoliberalism.

So far we have seen women’s state feminist strategies working to reverse losses in women’s representation (e.g. the Support Stockings in 1991), but not to reverse losses in welfare state programs, such as child care. This does not mean that a reversal of such losses is not possible, however. The high proportion of women in decision-making positions, as both politicians and bureaucrats, will be a determining factor in the Swedish context. And, while so far there has been a move in the direction of privatization and away from universalism, the policies which have been pursued to date are not entrenched and are reversible. The modifications which have taken place are, for the most part, on a surface level and have not threatened the very fabric of ‘the People’s Home.’ The pursuit of a state feminist strategy is therefore still viable, but will perhaps be most successful if it is mixed with grassroots organizing by women (and men) on the ground who are most affected by the changes to welfare state policies.


1. In the postwar period, the average voter turnout for national elections in Sweden has been 86.3%, which is very high (Aylott 1999). Discontent with the EU among Swedes has resulted in low voter turnout for European-level elections. For example, the June 1999 election to the European Parliament saw only 38.3% of voters taking part, with many non-voters being anti-EU (Ruin 2000). This low turnout illustrates a problem of legitimacy for European institutions such as the European Parliament (Lindahl 2000).

2. The Swedish referendum on accession to the European Union took place on November 13, 1994; following a divisive campaign by both the ‘Yes’ and ‘No’ sides, 83% of the electorate took part in the referendum, with 52.3% voting in favour of joining the EU (Gstohl 2002).

3. Feminist skepticism on working with the state does not generally apply to liberal feminists who seek to realize equality through legislative means. While there are different strains of liberal feminism, traditionally the focus has been on equal rights, which are to be achieved through state measures (e.g., Friedan 1974; for a critique of liberal feminism see Jaggar 1983).

4. While the Social Democrats emphasized social justice with reference to access to and delivery of childcare services, the Conservative and Moderate parties had always emphasized ‘choice’ and were supportive of different types of childcare services, including private for-profit childcare. The Liberal Party often differed from the Conservatives and Moderates on details, but grew to support the idea of ‘choice’ and alternative forms of childcare (Daune-Richard & Mahon 2001).


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A draft version of this paper was presented at the York Political Economy Conference, Toronto, Canada, May 2003. I thank the participants for their comments. I would also like to thank Hester Eisenstein, Tammy Findlay, Leo Panitch, and Ann Porter for their comments and help.

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