Are ageing Nordic welfare states sustainable? An analysis of pension and care policies in Finland and Sweden

Abstract

Introduction: The article discusses the aging population in Nordic countries, focusing on Sweden and Finland, where the median age has steadily increased since 1950. The text emphasizes the impact of demographic changes on the old-age dependency ratio and the subsequent implications for the welfare stateObjective: It is examination and comparison of the aging policies of Nordic countries, with a specific focus on Finland and Sweden. The author aims to shed light on the differences in pension and long-term care systems between these two nations, challenging the perception of a common "Nordic pension model."Materials and methods: The article employs a theoretical background based on the "intergenerational reciprocity trichotomy" developed by André Masson. The methodological approach utilized in the research is that of a "comparative case study." The author analyzes the pension and long-term care systems of Finland and Sweden, reviewing key indicators, policy documents, and relevant research literature.Results: While the Swedish system is financially robust, it encounters political challenges due to low public pension levels, prompting discussions about potential reforms, such as increasing contribution rates for higher benefits. Finland's public pension system, characterized by stable political support, raises concerns about long-term financial sustainability. The decision-making model, led by social partners, may shift to a more parliamentary approach as trade union density decreases and aging-related issues become more significant for the electorate. Both countries have successfully promoted high employment rates among older workers, but long-term care policies pose a greater challenge to the sustainability of their welfare models. The growing importance of family and informal care, coupled with a reliance on migrant workers for healthcare, highlights the strain on the welfare systems. Demographic changes increase pressure on pro-old welfare policies, particularly in long-term care, with Sweden better positioned than Finland to sustain elevated spending towards the elderly.