The welfare state

(Välfärdssamhället)

Today, Sweden is a so-called welfare state. Welfare is about people’s living conditions, such as economy, health, education and housing.

A welfare state is based on the idea of solidarity – that everyone contributes to, and gets their share of, the welfare. To make this possible, the state tries to redistribute money and resources to the benefit of those who have the least. This is done through the tax system.

The history of the welfare state

(Välfärdssamhällets historia)

Sweden has not always been a welfare state. In the middle of the 19th century, Sweden was a poor country. Most of the population worked in agriculture.

From the middle of the 19th century until 1930, about 1.3 million Swedes emigrated to other countries, mostly to the US, Canada, South America and Australia. The reasons why so many people emigrated were poverty, religious persecution, lack of faith in the future and lack of political freedom.

At the end of the 19th century, Sweden changed from an agricultural society to an industrial one. The industries were based in the natural resources of the country, such as iron ore, timber, and water power.

Around the big industries, little towns were built where the industrial workers and their families lived, went to school and got medical care. The social care developed at the industries was part of the basis for today’s welfare state.

The politician Per Albin Hansson, who later became prime minister, began to talk about folkhemmet by the end of the 1920s. It is the idea that the people would share equally in the resources of the country.

After the industrialization and the idea of the welfare state, the Swedish social insurance developed. Today, it provides financial protection for people who for various reasons cannot work to support themselves. The social insurance covers parental leave, illness, disability and old age. The social insurance authority in Sweden is Försäkringskassan.

How is the welfare state financed?

(Hur betalas välfärden?)

Welfare is expensive. It is financed through taxes, payroll taxes, and national insurance contributions paid by the individual.

Everyone in Sweden pays taxes on their earnings. Everyone also pays value added tax on everything they buy.

You only pay part of the cost for medical care, dental care and geriatric care. This is called national insurance contribution, egenavgift. The rest of the cost is paid through taxes.

An employer pays a fee to the state as well as wages to employees. This fee is called employer’s fee or payroll tax, arbetsgivaravgift.