Economic hardship in young adulthood: a cause for concern or a matter of course while settling into the Swedish labour market?

Abstract

This chapter utilises longitudinal Swedish register data to examine youths' labour market trajectories, with a focus on the complexity, timing, and duration of labour market disadvantage for individuals with and without experience of early adulthood economic hardship, as indicated by different degrees of social assistance receipt. Findings from multinomial regression suggest that when early adulthood economic hardship is extensive, this is associated with elevated risks of disadvantaged labour market trajectories, such as having an insecure labour market position through large parts of the twenties or following a track of long-term labour market exclusion. On the other hand, experience of low degrees of hardship only had a weak association with disadvantaged labour market trajectories. These findings imply that social-democratic welfare states such as the Swedish one are effective in addressing low levels of financial hardship without incurring long-term disadvantages through a relatively generous benefits and social services system. However, similar to liberal welfare states, the Swedish welfare state also struggles when hardship is prolonged and the family is not available as a safety net.