Voluntary Unemployment Insurance and Trade Union Membership: Investigating the Connections in Denmark and Sweden

Abstract

AbstractThe high rate of trade union membership in Nordic countries is often attributed to the way in which unemployment insurance is organised: that is, as a voluntary scheme which is administered by trade union-linked funds (the so-called Ghent system). However, since trade unions and unemployment insurance funds are formally independent from each other, and alternatives to traditional trade union-linked unemployment funds are available, it is far from clear why the more expensive option of a dual membership in trade union and unemployment insurance is generally favoured. Comparing current characteristics and the operation of the Ghent system in Denmark and Sweden, the article identifies incentives for joining an unemployment insurance fundper seand, secondly, factors which make such a dual membership appealing. It shows that some of these apply to both countries, such as the strong identification with trade unions or the lack of a transparent institutional separation, while others are country-specific, such as job search support in Denmark and access to improved benefit provision in Sweden.