Swedish Active Labor Market Policy: Retrospect and Prospect

Sweden has worked to reduce unemployment through active rather than passive labor market policies. Active labor market policy (ALMP) seeks to increase and to match labor demand and trained labor supply. Success is difficult to measure scientifically, but Sweden has achieved a low unemployment rate. Inflation is higher than desired but probably lower than it would have been without ALMP. Swedish activities have included: 1. job creation, 2. retraining and relocation of workers, 3. wage equalization and differentiation, and 4. adjustment subsidies. Programs are administered by the National Labor Market Board through 24 local labor market boards. Their expenditures in 1982-1983 amounted to 2.4% of the gross national product. Drawbacks and errors have offset some of the anti-inflationary effects sought through ALMP, but employment subsidies and a stronger employment service are positive developments. Inflation-dampening expansion policies are needed.