Swedish social policy for families and children Jan O. Jonsson - - PowerPoint PPT Presentation

Swedish social policy for families and children

Jan O. Jonsson Nuffield College, Oxford; Swedish Institute for Social Research (SOFI) Carina Mood Swedish Institute for Social Research (SOFI); Institute for Futures Studies

Sweden

Sweden

• Population: 10 M (NZ 5M)
• GDP/cap: Rank 16-18 (NZ 28-31)
• HDI: Rank 14 (NZ 13)
• Public expenditures ≈ 50% of GDP (NZ ≈ 40%)

Sweden

• Population: 10 M (NZ 5M)
• GDP/cap: Rank 16-18 (NZ 28-31)
• HDI: Rank 14 (NZ 13)
• Public expenditures ≈ 50% of GDP (NZ ≈ 40%)
• Capitalist welfare state – regulated market economy,

large public sector

Sweden

• Population: 10 M (NZ 5M)
• GDP/cap: Rank 16-18 (NZ 28-31)
• HDI: Rank 14 (NZ 13)
• Public expenditures ≈ 50% of GDP (NZ ≈ 40%)
• Capitalist welfare state – regulated market economy,

large public sector

• Large immigration: around 20% foreign born

Sweden

• Population: 10 M (NZ 5M)
• GDP/cap: Rank 16-18 (NZ 28-31)
• HDI: Rank 14 (NZ 13)
• Public expenditures ≈ 50% of GDP (NZ ≈ 40%)
• Capitalist welfare state – regulated market economy,

large public sector

• Large immigration: around 20% foreign born
• Children 0-15: ≈17% (NZ ≈ 20%)

Sweden

• Population: 10 M (NZ 5M)
• GDP/cap: Rank 16-18 (NZ 28-31)
• HDI: Rank 14 (NZ 13)
• Public expenditures ≈ 50% of GDP (NZ ≈ 40%)
• Capitalist welfare state – regulated market economy,

large public sector

• Large immigration: around 20% foreign born
• Children 0-15: ≈17% (NZ ≈ 20%)
• Fertility 1.9 (NZ=1.9)

10000 20000 30000 40000 50000 60000 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sweden OECD - Total

GDP per capita (US $, PPP)

Source: OECD

10000 20000 30000 40000 50000 60000 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 New Zealand Sweden OECD - Total

GDP per capita (US $, PPP)

Source: OECD

Infant mortality rate (deaths/1000 <age 1)

Source: Gapminder

20 40 60 80 100 120 1900 1904 1908 1912 1916 1920 1924 1928 1932 1936 1940 1944 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 New Zealand Sweden

Public social social spending, % of GDP

Includes pensions, health, family, unemployment, illness, childcare, etc. Not education. Source: OECD

0-17: 14% All: 11% 0-17: 9% All: 9%

Rel elat ative e pov pover erty, 50% of median (OECD 2014)

50% of median: SW≈23,000 NZD (NZ≈20,000 NZD) Disp eqv hh income

Poverty (50%md) before and after taxes & transfers (whole population)

Source: OECD 2016

5 10 15 20 25 30 35 40 5 10 15 20 25 30 35 40 ISR TUR USA MEX LVA CHL EST ESP GRC CAN KOR ITA AUS PRT POL NZL GBR HUN CHE BEL DEU IRL SVN SWE AUT SVK FRA LUX NOR NLD ISL CZE FIN DNK % % Poverty rate after taxes and transfers Poverty rate before taxes and transfers²

Timeline of Swedish social policy

1930’s: Focus on family and health

• Recession, unemployment, poverty
• Lort-Sverige (”Dirty Sweden”) – housing, hygiene
• Myrdal ”Crisis in the population question” – low nativity
• Folkhemmet (”People’s home”), Social Democrats (Hansson)

1930’s: Focus on family and health

• Preventive care for mothers (MVC)
• Preventive care for children (BVC)
• ”People’s dental care”, free for children
• School health care
• State funding for free school lunches
• Child allowance 1937 (not fully universal)
• Family housing: ”Barnrikehus”
• Housing allowance

Post WW2: Building ”the strong society”

• The record years: High growth, full employment
• “The strong society” – a welfare state providing social

protection for all people

• Child allowance (1948), universal
• Introduction of income-related social insurances

(employer-employee-contributions) 1950s

• Expansion of health care, child care
• Introduction of the comprehensive school 1962-72
• Housing ”The million programme” 1965-75
• Parental leave introduced 1974

The “strong society” remained pretty strong until…

…1980s: ideological shift (mild 3rd way)

• Privatization and marketization of the public sector
• Reduced regulation of the market

1990’s: Crisis

• Housing bubble, bank insolvency and bailout
• Depression 1991 to 1993 – negative growth
• Unemployment: from 2 to 10%
• Cutbacks in benefits, e.g. reduced child allowance
• Reduced replacement rates of social insurances
• Cash benefits suffered, welfare services not so much.

2000’s: Where are we now?

1990’s recession led to re-structuring of economic and social policy. Some parts of the ”strong society” never recovered despite high growth.

• Unemployment now 5-6% in good times (2% before

recession)

• Increasing income inequality (both top and bottom)
• Real income growth across distribution, but less

increase of benefits than earnings

• Lower replacement rates in social insurances – far

from universal income protection

• In-kind provision (health, child care) has however

continued to grow

• E.g., Maxtaxa – a major reform in 2002. Sharply

reduced child care fees.

The he Swedis Swedish welf welfar are state

/

Welfare state components

Universal or subsidized services Education, childcare, health, preventive care

Welfare state components

Universal or subsidized services Education, childcare, health, preventive care Cash benefits universal Child allowance Cash benefits, means-tested Social Assistance, Housing Allowance

Welfare state components

Universal or subsidized services Education, childcare, health, preventive care Social insurance, income related + basic protection Illness, disability, parenting NB: not unemployment Cash benefits universal Child allowance Cash benefits, means-tested Social Assistance, Housing Allowance

Welfare state components

Universal or subsidized services Education, childcare, health, preventive care Social insurance, income related + basic protection Illness, disability, parenting NB: not unemployment Cash benefits universal Child allowance Cash benefits, means-tested Social Assistance, Housing Allowance Tax Employer + employee contributions

Universality?

• What is universal is primarily services: High quality child

care, education, health care and preventive care at low or no cost

• Same for all. Universal platform regardless of parental

resources

• Motives:

– All children’s well-being and well-becoming – Investment (use full potential) – Equality of opportunity (fairness)

• Cash benefits are a mix of universal/flat-rate, insurance

based, and means-tested. Mostly insurance based.

Welfare state components

Universal or subsidized services Education, childcare, health, preventive care Social insurance, income related + basic protection Illness, disability, parenting NB: not unemployment Cash benefits universal Child allowance Cash benefits, means-tested Social Assistance, Housing Allowance Tax Employer + employee contributions

INSURANCE BASED RESIDUAL

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Yes Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Universal basic income Yes Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Yes Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Yes Child allowance (condition: child) Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Yes Child allowance (condition: child) Social insurance (condition: work history) Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Yes Child allowance (condition: child) Social insurance (condition: work history) Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Social assistance Yes Child allowance (condition: child) Social insurance (condition: work history) Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Universality of cash benefits

Income selectivity (means test) No Yes Other selectivity No Social assistance Yes Child allowance (condition: child) Social insurance (condition: work history) Housing allowance (conditions: age, family type) Selectivity on legal residency – debate

• Cf. Bergh 2004

Cash Cash benef benefit its

/

Child allowance, universal

• Ages 0-18 (-19, Student allowance)
• Not taxable

SEK NZD N of children 1 1250 210 2 2650 450 (2*1250+150) 3 4480 760 (3*1250+730) 4 6740 1150 (4*1250+1740) 5 9240 1600 (5*1250+2990)

Parental allowance

Mostly insurance-based:

• Parental leave 480 days (≈16 months) in total
• 78% of earnings for 390 days, but capped.

Minimum benefit 1220 NZD/month Maximum benefit 4700 NZD/month

• Flat rate (1220 NZD/month) for another 90 days
• Qualification: Work for 240 days before childbirth
• Otherwise: Flat rate (1220 NZD/month) for the entire 480-day

period Taxable as wages

Other social insurances

Sickness insuran ance

• 78% of income, decreasing to 75% after a year
• Maximum benefit: 4000 NZD/month
• Minimum benefit: 1600 NZD/month
• Taxable as wages

Di Disab ability pen ension

• 65% of income
• Maximum benefit: 3100 NZD/month
• Minimum benefit: 1600 NZD/month
• Taxable as wages

Means-tested cash benefits

Ho Hous using ng allowa wanc nce

• Support for housing costs

So Social ial assistance

• Residual – final safety net
• Discretionary but minimum level
• After housing, etc.: 1 parent, 2 children ≈1500 NZD/month

2 parents+ 2 children ≈2000 NZD/month

• Roughly ≈ 50% of median income (but variation)
• Real value has increased but value relative to median has

decreased (wages have increased more)

• Tapers for work income introduced to reduce ”poverty trap” – no

effect on transition to work Means-tested benefits are not taxable

Ser Servi vices es

Education

Childcare ≈ 85% enrolled Free 15h/ week ages 3-5 Strongly subsidized (maxtaxa) Part of educational system since the 1990’s Pre-school (compulsory), 1 year No fees or parental contributions

1-5 6

Upper secondary education, 3 years No fees or parental contributions Academic track – qualify for tertiary Vocational track – can qualify for tertiary ≈70% get degree

7-15

Com prehensive school (compulsory), 9 years No fees or parental contributions No formal tracking (streaming)

Age

Tertiary education No fees ≈35% get degree

16-19 19- Coverage

Education

Childcare ≈ 85% enrolled Free 15h/ week ages 3-5 Strongly subsidized (maxtaxa) Part of educational system since the 1990’s Pre-school (compulsory), 1 year No fees or parental contributions

1-5 6

Upper secondary education, 3 years No fees or parental contributions Academic track – qualify for tertiary Vocational track – can qualify for tertiary ≈70% get degree

7-15

Com prehensive school (compulsory), 9 years No fees or parental contributions No formal tracking (streaming)

Age

Tertiary education No fees ≈35% get degree

16-19 19- Coverage

Education

Childcare ≈ 85% enrolled Free 15h/ week ages 3-5 Strongly subsidized (maxtaxa) Part of educational system since the 1990’s Pre-school (compulsory), 1 year No fees or parental contributions

1-5 6

Upper secondary education, 3 years No fees or parental contributions Academic track – qualify for tertiary Vocational track – can qualify for tertiary ≈70% get degree

7-15

Com prehensive school (compulsory), 9 years No fees or parental contributions No formal tracking (streaming)

Age

Tertiary education No fees ≈35% get degree

16-19 19- Coverage

Teaching (salaries) 55% Buildings etc 17% Meals 6% Equipment 5% Health care 3% Other 14%

Spending components, primary school

Child and youth health care (free)

MVC (Maternal care clinics): Health checks, parental education and support, risk screening BVC (Child well clinics) Health checks, developmental checks, language screening, vaccinations, parental education and support 0-5 Prenatal

Age

In-school health care Health checks, developmental checks, vaccinations, support 6-19 Primary and hospital care, prescription drugs 0-18 UMO Youth clinics

• Repr. health,

support 13-25 Dental care 0-22

Swedish social policy in the 2000’s: Changes and challenges

Maxtaxa reform 2002

Before:

• SES and ethnic inequalities in enrolment
• Large differences in fees across municipalities

Motives for reform:

• Child level - equal access to education
• Parent level – equal possibilities to work

Reform content:

• Sharply reduced fees for childcare and after-school care
• Fee: 3-2-1-0% of income, and total cap ≈ 200/150/60/0 NZD
• Access (15h) also if unemployment, parental leave
• Compensation from state to municip (0.4% of state budget)

Effects:

• Improved family economy (≈ 250 NZD, some much more)
• Increased attendance: 65-85%
• Equalization in attendance by SES and ethnic background
• Equalization of costs across municipalities
• Increased fertility (≈10%)
• Negligible effect on labour supply

2000’s: Continued marketization

Large expansion of independent providers (private companies or organisations) childcare, schools, health care, and preventive care

• Receive public funding and have same rights and

requirements as public providers For example: Skolpeng (”school money”)

• Paid from municipality to school to cover all school

costs

• Same for public and private providers
• Higher if disadvantaged socioeconomic composition
• r many children with special needs
• Schools cannot charge fees or require contributions

from parents

2000’s: Growing immigration

• Large humanitarian immigration (Syria, Iraq,

Afghanistan, Eritrea, etc.)

• Puts pressure on state budget and welfare system
• In 2017, direct costs of handling inflowing migration 70

billion SEK (12 billion NZD) – 7% of GDP

• Continued net cost also after the first few years due to

low employment rates (especially among women)

• Also illegal stayers, and inflow of poor EU citizens
• Large welfare state requires high employment – hard to

sustain universal welfare state with high immigration

Final conclusions/remarks

• The logic of the Swedish universality is that people are more

willing to contribute (taxes) if they get something back that they value (e.g., free or subsidized high quality services)

• Swedish policy has emphasized the child as an individual

and not only part of a family – provision of equal opportunities regardless of family background

• The core of the Swedish welfare state is universal provision
• f services - this part has been robust and even expanded
• ver time, and has strong support from the public and across

the political spectrum

• Cash benefits and social insurances have seen more

changes over time, mostly away from universalism, but trends have been erratic

Has universality been a success?

• We do not have a counterfactual (we cannot say what

Sweden would have been like with other policy choices), but we can compare with other countries and over time

• In an international perspective, we have high social mobility,

robust finances, and high growth

• Reforms towards more universality have had intended

positive effects:

• Early health care reforms affected health, mortality

and educational outcomes both in childhood and later on

• Childcare reform in 2002 – effects on fertility positive.

Effects on children are still being evaluated in Sweden, but similar reforms in Norway show large positive effects

• n cognitive skills, educational achievement, etc.
• In both cases effects have been equalizing – stronger

effects for low income and single parent families

/ end

/ end

Spending on education (Sweden)

• Child care ages 0-5 ≈ 1.5% of GDP
• Primary & secondary education ≈ 4% of GDP
• Tertiary education ≈ 1.5% of GDP

Spending on child care, primary, secondary = roughly 20,000 NZD per child per year

Sweden’s total public spending, components

Source: OECD 2016

General governance 13% Defense 2% Law and protection 3% Infrastructure 8% Health care 14% Education 13% Social protection 43% Other 4%

Humanitarian immigration 2013-14 (figures per million of population)

2000 4000 6000 8000 10000 Japan Spain Ireland United States Canada United Kingdom Finland Greece France Italy Belgium Netherlands Germany Norway Denmark Switzerland Austria Hungary Sweden

Humanitarian migration (OECD 2015)

Permanent humanitarian migrants per million population (2013) (Hungary, Greece N/A) Asylum seekers per million population (2014)

Humanitarian immigration 2013-14 (figures per million of population)

2000 4000 6000 8000 10000 Japan Spain Ireland United States Canada United Kingdom Finland Greece France Italy Belgium Netherlands Germany Norway Denmark Switzerland Austria Hungary Sweden

Humanitarian migration (OECD 2015)

Permanent humanitarian migrants per million population (2013) (Hungary, Greece N/A) Asylum seekers per million population (2014)

Long-term effects (Scandinavian evidence)

Child care expansion

• Large positive effects on cognitive skills,

educational achievement, labour market

• utcomes
• Effects stronger for low-SES children

Early health care

• Large positive effects on child and adult health –

stronger for children to singe mothers

• Positive effects on educational achievement

Sources: Havnes & Mogstad, Bharadwaj et al, Bhalotra et al

0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 P05 P10 P25 P50 P75 P90 P95

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Real income by percentile 1991-2013 (population)

Sweden

• Population: 10 M (NZ 5M)
• GDP/cap: Rank 16-18 (NZ 28-31)
• HDI: Rank 14 (NZ 13)
• Public expenditures ≈ 50% of GDP (NZ ≈ 40%)
• Capitalist welfare state – regulated market economy,

large public sector

• Large immigration: around 20% foreign born
• Children 0-15: ≈17% (NZ ≈ 20%)
• Fertility 1.9 (NZ=1.9)
• 75% of children live with both parents
• 84% of children aged 1-5 in childcare