Research

In research on public economics, climate politics and the welfare state, voters’ informational and cognitive biases are commonly understood as impeding future-oriented policy-making, by incentivizing policymakers to trade off long-term investments against short-term consumption when facing competitive elections or liquidity constraints. Yet, the assumptions about how policymakers perceive these alleged trade-offs have not yet been verified. This study reports results from a survey of Swedish local government politicians, centring around experiments about environmental-friendly public investments. We find that most politicians perceive that electoral competition stimulates rather than impedes investments. Politicians are, however, less supportive of investments if these need to be financed through absolute losses rather than gains foregone, which illustrates the relevance of endowment effects in long-term governance. We furthermore show that our micro-level observations are consistent with macro-level investment expenditure patterns. These findings demonstrate that accounting for policymakers’ own perceptions is important for advancing our understanding of future-oriented policy-making.

Studies of whether long lines at polling stations may impact voter turnout are scarce, and hitherto none has analyzed a high-turnout proportional electoral system. We investigate whether problematic election-day lines at polling places during the 2022 Swedish general election contributed to the considerable decline in turnout. Our analyses combine data on polling stations’ closing times in the 20 largest municipalities with survey data on poll workers in three municipalities. The results suggest that precincts with line problems on election day saw lower turnout than comparable precincts. Interestingly, this effect appears to have been partly offset by some voters instead casting their ballots in an advance voting polling station on election day. Although the line problems were not widespread enough to explain more than a fraction of the overall decline in turnout, congestion risks are important to consider in future elections to avoid a higher and more unequal cost of voting.

This study seeks to advance the scholarship on trade union heterogeneity. Expanding on previous research, we develop a theoretical framework that distinguishes unions along two dimensions—members’ labor market risk exposure and the predominance of white-collar workers—that help shape their labor market policy preferences and advocacy. The framework is then assessed in a within-country mixed-methods analysis. We first document how members in 35 Swedish unions map onto the two dimensions, using fine-grained survey data, and then qualitatively analyze the advocacy of seven unions with different membership characteristics. Our results confirm the relevance of isolating the two dimensions in analyses of both membership preferences and elite advocacy. These findings contrast with existing accounts of the contemporary Swedish union movement and carry implications for many other countries with fragmented union landscapes. They particularly demonstrate the importance of disaggregating union membership in micro- and macro-level research involving unions and their power resources.

The COVID-19 pandemic triggered a globally spread—but differently timed—implementation of school closures and other disruptive containment measures as governments worldwide intervened to curb transmission of disease. This study argues that the timing of such disruptive interventions reflects how governments balance the principles of precaution and proportionality in their pandemic decision-making. A theory is proposed of how their trade-off is impacted by two interacting institutional factors: electoral democratic institutions, which incentivize political leaders to increasingly favor precaution, and high state administrative capacity, which instead makes a proportional strategy involving later containment measures more administratively and politically feasible. Global patterns consistent with this theory are documented among 170 countries in early 2020, using Cox models of school closures and other non-pharmaceutical interventions. Corroborating the theorized mechanisms, additional results indicate that electoral competition prompts democratic leaders’ faster response, and that this mechanism is weaker where professional state agencies have more influence over policy-making.

This article systematically reviews trends in numerous economic policy indicators in eighteen OECD countries since the early 1980s, synthesizing findings about the fate of states’ economic interventionism from several customarily separate literatures. Rather than observing any paradigmatic policy shift, the review finds that policies with markedly different ideational foundations currently cohabitate. In line with non-interventionist prescriptions, policymakers have largely abandoned the intrusive heterodox ‘power tools’ of previous eras, while establishing new norms for monetary policy based on monetarist theory. However, this has not led to a full retreat of economic interventionism. Instead, policymakers are gradually developing a new, albeit more constrained, approach to promoting economic activity in line with selected distributional goals—here labelled the micro-interventionist state, or the ‘Swiss Army Knife State’, as it were. The cross-partisan appeal of the ‘multi-tools’ associated with this approach—such as horizontal industrial policy, active social policy, and strategic tax expenditures and procurement—partly stems from their versatility, as policymakers can use them to very different distributional ends. To better understand the politics and distributional consequences of contemporary economic policies, scholars need to take their versatility more seriously, shifting focus theoretically and empirically from how much to how policymakers intervene in the economy.

This is an article about the foundations of human well-being. It makes two integrated contributions. We first examine well-being around the contemporary world, finding a remarkable correlation between subjective and objective measures and a considerable variation in overall well-being among countries. We then argue that certain institutional conditions have laid the basis for these differences. Integrating insights from several research strands, we outline a new explanatory model of popular well-being that considers the interactions between three institutional provisions: a well-functioning democracy, advanced state capacity, and an encompassing social protection system. To test the relationships implied, we used a new dataset involving more than 100 countries in the contemporary world that extends six decades back in time. Our investigations indicated that all three factors play a role in promoting popular well-being. However, to understand how, we need to consider the ways in which they can complement, substitute and mutually reinforce each other.

Employment subsidy programs have experienced considerable expansion across Europe in recent decades. To date, most studies analyzing this policy shift have assumed that these programs are largely equivalent in terms of their designs, effects, and explanations. In contrast, this article argues that employment subsidies are best understood as versatile multi-purpose tools that can be used as means to rather different distributional ends. Using Multiple Correspondence Analysis to explore novel data from hundreds of employment subsidy programs across Europe, this article develops a new typology based on two overarching trade-offs. The typology highlights that employment subsidies may be designed to counteract as well as to sustain insider/outsider divides in the labor market, and that they may be designed to tackle either structural or cyclical labor market problems. In a first empirical evaluation of the typology, programs with different designs are found to vary systematically in terms of distributional outcomes and starting conditions.

Comparative scholars fundamentally disagree about the impact of partisan politics in modern welfare states, particularly in certain ‘new’ policy areas such as active labor market policy (ALMP). Using new data on 900 ALMP programs across Europe, this study attempts to reconcile a long-standing dispute between the traditional ‘power resources’ approach and the ‘insider/outsider’ approach pioneered by Rueda. The study argues that both left-wing and right-wing governments invest in ALMP but that politics still matter because parties’ preferences regarding unemployment differ. The left is more inclined to expand programs primarily designed to reduce unemployment, which exclusively target ‘core’ groups in, or at risk of, unemployment, and programs in which participants are no longer counted among the unemployed. In contrast, both sides are equally prone to expand programs that also—or instead—target people who are not yet participating in the labor market, which thus also—or instead—serve to increase labor supply.

Conventional wisdom among comparative political economists maintains that the participation of employers in policymaking and policy implementation, fostered by corporatist arrangements, is crucial to the successful expansion of active labor market policy (ALMP). This article introduces a transaction-oriented theory of corporatism, partisanship, and ALMP that challenges the dominant view. It argues that corporatist arrangements do not affect the overall scope of ALMP but facilitate particular types of ALMP programs, ones that require the joint participation of employers and the state and involve a transfer of public resources to employers. Corporatist arrangements facilitating such programs—which center-right parties tend to prefer over those produced unilaterally by the state—also shift the focus of partisan conflict over ALMP from the level of public expenditure to the structure. Evidence for these claims is provided by time-series cross-sectional analyses of twenty-one OECD countries since the mid-1980s.

Försäkringsmässighet lyfts ofta fram som ett viktigt mål för de svenska socialförsäkringarna. Innebörden i begreppet försäkringsmässighet är emellertid mångtydig, vilket har lett till att olika aktörer använder begreppet på olika sätt för att främja sina intressen. Med andra ord har försäkringsmässigheten kommit att användas för att dölja, snarare än tydliggöra politiska ambitioner. Detta är olyckligt då det bland de aktuariska principer som försäkringsmässigheten bygger på gömmer sig en potentiell omfördelningskonflikt mellan personer med olika kombinationer av inkomst och risk för arbetslöshet eller sjukdom.

This chapter seeks to highlight and address some theoretical and empirical challenges in comparative research on active labor market policy (ALMP). First, it highlights a number of connections and overlaps between ALMP and other analytical concepts. Second, it presents a brief state-of-the-art of the comparative research on ALMPs, focusing on 1) their macro-economic effects and 2) their political and economic explanations. Third, it argues that to advance scholarship in both these strands, scholars need to recognize that ALMPs are profoundly versatile policy tools that can be designed to trigger a variety of labor market transitions with distinct distributional consequences. Fourth, it spells out some theoretical and empirical implications of this insight for future research, including the importance of shifting from country-level analyses of ALMP to program-level analyses. Fifth, the chapter previews a number of sparsely-used data sources on program characteristics, reform events, and public opinion on ALMP that may pave the way for new advancements in the field. 

This chapter investigates developments in the unemployment benefit systems of 20 advanced economies since the turn of the 20th century, with respect to three core dimensions: their inclusivity, their generosity, and their conditionality. The analysis includes a number of well-established indicators of benefit systems such as coverage rates, net replacement rates, and benefit duration. However, it also considers aspects whose cross-national developments have not previously been much analyzed, including benefit recipiency, job-search and availability requirements, as well as an original measure of benefit degressivity that captures how the benefit level declines over the unemployment duration. By considering these aspects, the analysis can observe additional forms of contractions of countries’ benefit systems, which are not captured by the more commonly used indicators. The chapter also considers how benefit systems may be affected by fiscal austerity and populism, and suggests that their effects are likely to vary across the three core dimensions. 

The concept of social investment has gained ground among European Union policymakers as a strategy to reconcile the goals of employment, growth, and social inclusion. However, scholars have criticized the social investment approach for not achieving its intended distributional consequences and have questioned the complementarity between the goals of increasing employment and decreasing poverty. We argue that distinguishing between the “Enlightened Path”—more commonly known as the “Nordic approach”—and the “Third Way” approach to social investment is important for understanding the relationships between social investment policies, employment, and poverty. By critically examining policy developments in Sweden, we find that the recent noticeable increase in relative poverty can best be accounted for by changes in tax and transfer policies that represent a shift from the Nordic approach to the Third Way approach, whereas an “employment vs. poverty” trade-off is mitigated by the sustained presence of a compressed wage structure.

As recent decades have seen a growing interest in reforming advanced welfare states to promote employment, active labor market policy (ALMP) has emerged as a major topic of inquiry among comparative political economists. Whereas the literature to date disagrees on, and mostly downplays, the role of partisan politics in the development of ALMP, this dissertation shows that political actors systematically use ALMP programs in different ways to achieve distinct political aims. Drawing mostly on a rich, new panel data set on approximately 1,000 programs across Europe, the dissertation draws attention to several politically salient dimensions of ALMP that need to be taken seriously to understand how partisan politics matter in advanced industrial democracies.

Essay I reconciles the conflicting understandings of partisanship and ALMP in the ‘power resources’ and ‘insider/outsider’ schools by highlighting that ALMP programs may serve two overarching purposes. The essay shows that left-leaning governments are particularly inclined to expand programs designed primarily to reduce unemployment, whereas governments of all suits are equally supportive of programs that also, or instead, serve to increase labor supply.

Essay II focuses on employment subsidies, documenting how these may be designed to tackle different labor market challenges among different target groups. Emphasizing institutional path dependency, the essay then shows that cross-national variation in employment subsidy design broadly reflects the varying institutional regimes in different parts of Europe.

Essay III reconsiders the conventional view on the importance of employer involvement and corporatist institutions for ALMP by separating programs produced unilaterally by the state from programs, such as employment subsidies, produced jointly by the state and employers to the benefit of both. The essay finds that corporatist institutions primarily matter for ALMP by paving the way for governments—especially with business-friendly center-right parties—that favor joint over unilateral production.

The introductory essay argues that ALMP forms part of a larger family of economic policies that are sufficiently versatile to be sustained and used by actors across the political spectrum. Reviewing long-term trends in economic policy in OECD countries, it shows that these policies, which are here labelled micro-interventionist multi-tools, have expanded considerably since the early 1980s. 

We study how immigrants’ retirement expectations and behavior are affected by formal retirement institutions in their country of origin. The analysis combines newly collected world-wide gender-specific data on retirement age regulations with individual-level panel data from across Europe. Although the institutions in the country of residence are the most influential, immigrants are still considerably more likely to retire at an age that matches an institutionalized retirement age in their country of origin. The relative importance of the origin country institutions is highest for immigrants who arrived at a higher age, those who have low financial literacy, and those for whom pension rights are internationally portable. These results indicate that mechanisms related to both social norms and economic incentives are at work. Our findings demonstrate how immigrants’ beliefs and behavior are influenced not only by informal cultural institutions stemming from their country of origin (documented in previous research), but also by specific and alterable formal institutions determined by legislative processes. 

This study shines new light on an ongoing debate about the extent to which discouraging enforcement activities are necessary to make regulated actors comply with government regulations. Specifically, it evaluates a long-standing but essentially unenforced regulation that mandated employers in Sweden to post their vacancies at the Public Employment Service (PES) to improve matching and the labor market prospects of disadvantaged workers. Using comprehensive vacancy data from the PES, it tests whether the regulation – despite not being enforced – influenced employers’ vacancy posting behavior in the period prior to its partial repeal in 2007. Exploiting the fact that the repeal did not apply to employers in the central government sector, the difference-in-differences analyses conducted in this study identify a substantial and significant negative effect of repealing the unenforced law on employers’ vacancy posting behavior, under reasonable assumptions. This finding is at odds with standard deterrence models of regulatory compliance and hints at an important role for organizational factors related to cultures and norms. A supplementary analysis of heterogeneous effects among local government employers investigates to what extent some organizational factors are correlated to compliance with the unenforced regulation. 

The concept of social investment has gained increasing traction among European Union policymakers, as a strategy to reconcile the goals of employment, growth, and social inclusion. In recent years, however, scholars have criticized the social investment approach for not being able to achieve its intended distributional consequences and have raised doubts about whether the goals of increasing employment and decreasing poverty are reconcilable. This paper argues that distinguishing between the ‘Nordic approach’ and the ‘Third Way approach’ to social investment is key both for describing policy developments and for understanding the relationships between social investment policies, employment and poverty. Based on an exploration of recent trends in social investment policies, employment and poverty in Sweden, we propose that the recent noticeable increase in poverty can best be accounted for by changes in social insurance policy and tax policy that represent a shift from the Nordic approach to the Third Way approach, whereas an ‘employment vs. poverty’ trade-off is mitigated by the sustained presence of a compressed wage structure. A set of panel data analyses on 24 European countries over the last decade provide preliminary evidence that these mechanisms extend also beyond Sweden.

The concept of social investment has gained ground on the EU-level, manifested among other things in the launching of the ‘Social investment package’ by the EU Commission in 2013 and subsequent engagement in the follow up of that initiative. In this context, the Nordic experience has no doubt played an important role and Sweden is an interesting case in point for discussing the social investment approach. We argue that Sweden has long tradition of social investment which has contributed to a number of positive outcomes, such as low poverty and high employment. However, our examination of more recent trends suggests that the achievements are now jeopardised by the trend towards a cheaper ‘Third Way’ version of the social investment approach. Since the investment quality of policy interventions has been diluted, not least in the field of active labour market policy, and old redistribution policies are at drift, it has become difficult to combat old as well as new inequalities and social divisions. Still, a more enlightened development path is open but requires serious recasting of the social investment policy package.

In research on public economics, climate politics and the welfare state, voters’ informational and cognitive biases are commonly understood as impeding future-oriented policy-making, by incentivizing policymakers to trade off long-term investments against short-term consumption when facing competitive elections or liquidity constraints. Yet, the assumptions about how policymakers perceive these alleged trade-offs have not yet been verified. This study reports results from a survey of Swedish local government politicians, centring around experiments about environmental-friendly public investments. We find that most politicians perceive that electoral competition stimulates rather than impedes investments. Politicians are, however, less supportive of investments if these need to be financed through absolute losses rather than gains foregone, which illustrates the relevance of endowment effects in long-term governance. We furthermore show that our micro-level observations are consistent with macro-level investment expenditure patterns. These findings demonstrate that accounting for policymakers’ own perceptions is important for advancing our understanding of future-oriented policy-making.

Studies of whether long lines at polling stations may impact voter turnout are scarce, and hitherto none has analyzed a high-turnout proportional electoral system. We investigate whether problematic election-day lines at polling places during the 2022 Swedish general election contributed to the considerable decline in turnout. Our analyses combine data on polling stations’ closing times in the 20 largest municipalities with survey data on poll workers in three municipalities. The results suggest that precincts with line problems on election day saw lower turnout than comparable precincts. Interestingly, this effect appears to have been partly offset by some voters instead casting their ballots in an advance voting polling station on election day. Although the line problems were not widespread enough to explain more than a fraction of the overall decline in turnout, congestion risks are important to consider in future elections to avoid a higher and more unequal cost of voting.

This study seeks to advance the scholarship on trade union heterogeneity. Expanding on previous research, we develop a theoretical framework that distinguishes unions along two dimensions—members’ labor market risk exposure and the predominance of white-collar workers—that help shape their labor market policy preferences and advocacy. The framework is then assessed in a within-country mixed-methods analysis. We first document how members in 35 Swedish unions map onto the two dimensions, using fine-grained survey data, and then qualitatively analyze the advocacy of seven unions with different membership characteristics. Our results confirm the relevance of isolating the two dimensions in analyses of both membership preferences and elite advocacy. These findings contrast with existing accounts of the contemporary Swedish union movement and carry implications for many other countries with fragmented union landscapes. They particularly demonstrate the importance of disaggregating union membership in micro- and macro-level research involving unions and their power resources.

The COVID-19 pandemic triggered a globally spread—but differently timed—implementation of school closures and other disruptive containment measures as governments worldwide intervened to curb transmission of disease. This study argues that the timing of such disruptive interventions reflects how governments balance the principles of precaution and proportionality in their pandemic decision-making. A theory is proposed of how their trade-off is impacted by two interacting institutional factors: electoral democratic institutions, which incentivize political leaders to increasingly favor precaution, and high state administrative capacity, which instead makes a proportional strategy involving later containment measures more administratively and politically feasible. Global patterns consistent with this theory are documented among 170 countries in early 2020, using Cox models of school closures and other non-pharmaceutical interventions. Corroborating the theorized mechanisms, additional results indicate that electoral competition prompts democratic leaders’ faster response, and that this mechanism is weaker where professional state agencies have more influence over policy-making.

This article systematically reviews trends in numerous economic policy indicators in eighteen OECD countries since the early 1980s, synthesizing findings about the fate of states’ economic interventionism from several customarily separate literatures. Rather than observing any paradigmatic policy shift, the review finds that policies with markedly different ideational foundations currently cohabitate. In line with non-interventionist prescriptions, policymakers have largely abandoned the intrusive heterodox ‘power tools’ of previous eras, while establishing new norms for monetary policy based on monetarist theory. However, this has not led to a full retreat of economic interventionism. Instead, policymakers are gradually developing a new, albeit more constrained, approach to promoting economic activity in line with selected distributional goals—here labelled the micro-interventionist state, or the ‘Swiss Army Knife State’, as it were. The cross-partisan appeal of the ‘multi-tools’ associated with this approach—such as horizontal industrial policy, active social policy, and strategic tax expenditures and procurement—partly stems from their versatility, as policymakers can use them to very different distributional ends. To better understand the politics and distributional consequences of contemporary economic policies, scholars need to take their versatility more seriously, shifting focus theoretically and empirically from how much to how policymakers intervene in the economy.

This is an article about the foundations of human well-being. It makes two integrated contributions. We first examine well-being around the contemporary world, finding a remarkable correlation between subjective and objective measures and a considerable variation in overall well-being among countries. We then argue that certain institutional conditions have laid the basis for these differences. Integrating insights from several research strands, we outline a new explanatory model of popular well-being that considers the interactions between three institutional provisions: a well-functioning democracy, advanced state capacity, and an encompassing social protection system. To test the relationships implied, we used a new dataset involving more than 100 countries in the contemporary world that extends six decades back in time. Our investigations indicated that all three factors play a role in promoting popular well-being. However, to understand how, we need to consider the ways in which they can complement, substitute and mutually reinforce each other.

Employment subsidy programs have experienced considerable expansion across Europe in recent decades. To date, most studies analyzing this policy shift have assumed that these programs are largely equivalent in terms of their designs, effects, and explanations. In contrast, this article argues that employment subsidies are best understood as versatile multi-purpose tools that can be used as means to rather different distributional ends. Using Multiple Correspondence Analysis to explore novel data from hundreds of employment subsidy programs across Europe, this article develops a new typology based on two overarching trade-offs. The typology highlights that employment subsidies may be designed to counteract as well as to sustain insider/outsider divides in the labor market, and that they may be designed to tackle either structural or cyclical labor market problems. In a first empirical evaluation of the typology, programs with different designs are found to vary systematically in terms of distributional outcomes and starting conditions.

Comparative scholars fundamentally disagree about the impact of partisan politics in modern welfare states, particularly in certain ‘new’ policy areas such as active labor market policy (ALMP). Using new data on 900 ALMP programs across Europe, this study attempts to reconcile a long-standing dispute between the traditional ‘power resources’ approach and the ‘insider/outsider’ approach pioneered by Rueda. The study argues that both left-wing and right-wing governments invest in ALMP but that politics still matter because parties’ preferences regarding unemployment differ. The left is more inclined to expand programs primarily designed to reduce unemployment, which exclusively target ‘core’ groups in, or at risk of, unemployment, and programs in which participants are no longer counted among the unemployed. In contrast, both sides are equally prone to expand programs that also—or instead—target people who are not yet participating in the labor market, which thus also—or instead—serve to increase labor supply.

Conventional wisdom among comparative political economists maintains that the participation of employers in policymaking and policy implementation, fostered by corporatist arrangements, is crucial to the successful expansion of active labor market policy (ALMP). This article introduces a transaction-oriented theory of corporatism, partisanship, and ALMP that challenges the dominant view. It argues that corporatist arrangements do not affect the overall scope of ALMP but facilitate particular types of ALMP programs, ones that require the joint participation of employers and the state and involve a transfer of public resources to employers. Corporatist arrangements facilitating such programs—which center-right parties tend to prefer over those produced unilaterally by the state—also shift the focus of partisan conflict over ALMP from the level of public expenditure to the structure. Evidence for these claims is provided by time-series cross-sectional analyses of twenty-one OECD countries since the mid-1980s.

Försäkringsmässighet lyfts ofta fram som ett viktigt mål för de svenska socialförsäkringarna. Innebörden i begreppet försäkringsmässighet är emellertid mångtydig, vilket har lett till att olika aktörer använder begreppet på olika sätt för att främja sina intressen. Med andra ord har försäkringsmässigheten kommit att användas för att dölja, snarare än tydliggöra politiska ambitioner. Detta är olyckligt då det bland de aktuariska principer som försäkringsmässigheten bygger på gömmer sig en potentiell omfördelningskonflikt mellan personer med olika kombinationer av inkomst och risk för arbetslöshet eller sjukdom.

This chapter seeks to highlight and address some theoretical and empirical challenges in comparative research on active labor market policy (ALMP). First, it highlights a number of connections and overlaps between ALMP and other analytical concepts. Second, it presents a brief state-of-the-art of the comparative research on ALMPs, focusing on 1) their macro-economic effects and 2) their political and economic explanations. Third, it argues that to advance scholarship in both these strands, scholars need to recognize that ALMPs are profoundly versatile policy tools that can be designed to trigger a variety of labor market transitions with distinct distributional consequences. Fourth, it spells out some theoretical and empirical implications of this insight for future research, including the importance of shifting from country-level analyses of ALMP to program-level analyses. Fifth, the chapter previews a number of sparsely-used data sources on program characteristics, reform events, and public opinion on ALMP that may pave the way for new advancements in the field. 

This chapter investigates developments in the unemployment benefit systems of 20 advanced economies since the turn of the 20th century, with respect to three core dimensions: their inclusivity, their generosity, and their conditionality. The analysis includes a number of well-established indicators of benefit systems such as coverage rates, net replacement rates, and benefit duration. However, it also considers aspects whose cross-national developments have not previously been much analyzed, including benefit recipiency, job-search and availability requirements, as well as an original measure of benefit degressivity that captures how the benefit level declines over the unemployment duration. By considering these aspects, the analysis can observe additional forms of contractions of countries’ benefit systems, which are not captured by the more commonly used indicators. The chapter also considers how benefit systems may be affected by fiscal austerity and populism, and suggests that their effects are likely to vary across the three core dimensions. 

The concept of social investment has gained ground among European Union policymakers as a strategy to reconcile the goals of employment, growth, and social inclusion. However, scholars have criticized the social investment approach for not achieving its intended distributional consequences and have questioned the complementarity between the goals of increasing employment and decreasing poverty. We argue that distinguishing between the “Enlightened Path”—more commonly known as the “Nordic approach”—and the “Third Way” approach to social investment is important for understanding the relationships between social investment policies, employment, and poverty. By critically examining policy developments in Sweden, we find that the recent noticeable increase in relative poverty can best be accounted for by changes in tax and transfer policies that represent a shift from the Nordic approach to the Third Way approach, whereas an “employment vs. poverty” trade-off is mitigated by the sustained presence of a compressed wage structure.

As recent decades have seen a growing interest in reforming advanced welfare states to promote employment, active labor market policy (ALMP) has emerged as a major topic of inquiry among comparative political economists. Whereas the literature to date disagrees on, and mostly downplays, the role of partisan politics in the development of ALMP, this dissertation shows that political actors systematically use ALMP programs in different ways to achieve distinct political aims. Drawing mostly on a rich, new panel data set on approximately 1,000 programs across Europe, the dissertation draws attention to several politically salient dimensions of ALMP that need to be taken seriously to understand how partisan politics matter in advanced industrial democracies.

Essay I reconciles the conflicting understandings of partisanship and ALMP in the ‘power resources’ and ‘insider/outsider’ schools by highlighting that ALMP programs may serve two overarching purposes. The essay shows that left-leaning governments are particularly inclined to expand programs designed primarily to reduce unemployment, whereas governments of all suits are equally supportive of programs that also, or instead, serve to increase labor supply.

Essay II focuses on employment subsidies, documenting how these may be designed to tackle different labor market challenges among different target groups. Emphasizing institutional path dependency, the essay then shows that cross-national variation in employment subsidy design broadly reflects the varying institutional regimes in different parts of Europe.

Essay III reconsiders the conventional view on the importance of employer involvement and corporatist institutions for ALMP by separating programs produced unilaterally by the state from programs, such as employment subsidies, produced jointly by the state and employers to the benefit of both. The essay finds that corporatist institutions primarily matter for ALMP by paving the way for governments—especially with business-friendly center-right parties—that favor joint over unilateral production.

The introductory essay argues that ALMP forms part of a larger family of economic policies that are sufficiently versatile to be sustained and used by actors across the political spectrum. Reviewing long-term trends in economic policy in OECD countries, it shows that these policies, which are here labelled micro-interventionist multi-tools, have expanded considerably since the early 1980s. 

We study how immigrants’ retirement expectations and behavior are affected by formal retirement institutions in their country of origin. The analysis combines newly collected world-wide gender-specific data on retirement age regulations with individual-level panel data from across Europe. Although the institutions in the country of residence are the most influential, immigrants are still considerably more likely to retire at an age that matches an institutionalized retirement age in their country of origin. The relative importance of the origin country institutions is highest for immigrants who arrived at a higher age, those who have low financial literacy, and those for whom pension rights are internationally portable. These results indicate that mechanisms related to both social norms and economic incentives are at work. Our findings demonstrate how immigrants’ beliefs and behavior are influenced not only by informal cultural institutions stemming from their country of origin (documented in previous research), but also by specific and alterable formal institutions determined by legislative processes. 

This study shines new light on an ongoing debate about the extent to which discouraging enforcement activities are necessary to make regulated actors comply with government regulations. Specifically, it evaluates a long-standing but essentially unenforced regulation that mandated employers in Sweden to post their vacancies at the Public Employment Service (PES) to improve matching and the labor market prospects of disadvantaged workers. Using comprehensive vacancy data from the PES, it tests whether the regulation – despite not being enforced – influenced employers’ vacancy posting behavior in the period prior to its partial repeal in 2007. Exploiting the fact that the repeal did not apply to employers in the central government sector, the difference-in-differences analyses conducted in this study identify a substantial and significant negative effect of repealing the unenforced law on employers’ vacancy posting behavior, under reasonable assumptions. This finding is at odds with standard deterrence models of regulatory compliance and hints at an important role for organizational factors related to cultures and norms. A supplementary analysis of heterogeneous effects among local government employers investigates to what extent some organizational factors are correlated to compliance with the unenforced regulation. 

The concept of social investment has gained increasing traction among European Union policymakers, as a strategy to reconcile the goals of employment, growth, and social inclusion. In recent years, however, scholars have criticized the social investment approach for not being able to achieve its intended distributional consequences and have raised doubts about whether the goals of increasing employment and decreasing poverty are reconcilable. This paper argues that distinguishing between the ‘Nordic approach’ and the ‘Third Way approach’ to social investment is key both for describing policy developments and for understanding the relationships between social investment policies, employment and poverty. Based on an exploration of recent trends in social investment policies, employment and poverty in Sweden, we propose that the recent noticeable increase in poverty can best be accounted for by changes in social insurance policy and tax policy that represent a shift from the Nordic approach to the Third Way approach, whereas an ‘employment vs. poverty’ trade-off is mitigated by the sustained presence of a compressed wage structure. A set of panel data analyses on 24 European countries over the last decade provide preliminary evidence that these mechanisms extend also beyond Sweden.

The concept of social investment has gained ground on the EU-level, manifested among other things in the launching of the ‘Social investment package’ by the EU Commission in 2013 and subsequent engagement in the follow up of that initiative. In this context, the Nordic experience has no doubt played an important role and Sweden is an interesting case in point for discussing the social investment approach. We argue that Sweden has long tradition of social investment which has contributed to a number of positive outcomes, such as low poverty and high employment. However, our examination of more recent trends suggests that the achievements are now jeopardised by the trend towards a cheaper ‘Third Way’ version of the social investment approach. Since the investment quality of policy interventions has been diluted, not least in the field of active labour market policy, and old redistribution policies are at drift, it has become difficult to combat old as well as new inequalities and social divisions. Still, a more enlightened development path is open but requires serious recasting of the social investment policy package.