Unemployment and Labour Market Policies in the Scandinavian Countries

Abstract

Looked upon from outside, the Scandinavian welfare states exhibit important similarities with regard to labour market policy. Their governments all do a great deal m response to unemployment and they use the same type of measures for this purpose. Compared with what is regarded as normal in other modern Western nations, large amounts of money and other resources are spent on reducing unemployment or at least the burdens of unem ployment. It may thus seem that there is a Scandinavian model for labour market policy. However, when we take a closer look, we soon find that there are significant differences. The same types of programmes exist m all four countries, but they are applied in very different mixes. The main dividing line to be drawn here is between passive and active measures. We argue that active labour market policies are basically oriented towards commodification of labour power, i.e. the aim is to establish, keep or restore the saleability of labour power m the market. Passive measures, on the other hand, comprise no commodification element, although they are more or less linked to a requirement that recipients take the jobs available in the labour market. However, they generally lessen the pressure upon people to accept job offers from employers and in that sense there is no doubt a decommodifying function. From this perspective we maintain that the Swedish labour market policy contains the clearest element of commodification because it is most pronouncedly oriented towards making labour power saleable in the market. The opposite pole is represented by Denmark, where decommodifying cash benefits play the most important role. Norway and Finland are somewhere in between. For a long time Norway has had very low unemployment and accordingly less strong motives to develop its policy in the one or the other direction, while Finland, although having the reasons, has not put as much emphasis on active measures as Sweden or developed as generous passive measures as Denmark.