Mutually Dependent

©Pressens Bild Sweden

In Sweden the basic principle is that the social security systems must cover all members of society. Everyone pays towards our common welfare with taxes and contributions, and everyone, irrespective of income, is also covered by the system. This gives our welfare system legitimacy and creates security.
It is important to continuously review, evaluate and improve the security systems. It is important that these are funded and sustainable, not least for the sake of future generations. The recently implemented pension reform is an example of how we are meeting these criteria.Our choice of welfare system also supports the requirements for economic growth, as welfare and growth are mutually dependent. Extensive welfare provision requires high employment and growth. And given the right design, welfare in turn generates growth. It is important that the systems are designed so as to encourage work and that they are individual-based. In recent years we have also worked on reducing marginal effects, for example, by adjusting the design of the tax system and by introducing a ceiling for childcare charges.Real security promotes initiative and creativity. One basic requirement for coping with major changes in society is that people know there is a safety net, for example, in the form of unemployment insurance, training or collective agreements.Two encouraging indicators show we are moving in the right direction. For several years in succession, the total fertility rate in Sweden has risen and now stands at 1.8 children per woman. Generous and flexible parental insurance, combined with high-quality childcare for all children, have enabled Swedish parents to reconcile work and children. As a result, while a high proportion of Swedish women are gainfully employed and earn their own living, their fertility rate is also high.Raising fertility rates is not enough, however. Working lives must be prolonged. During the last five years, the employment rate among people aged 60-64 has risen from 48 to 58%. These achievements give cause for optimism regarding our future ability to provide good welfare for all our people.©OECD Observer, No 248, March 2005See also replies by five other OECD ministers: Netherlands’ minister for social affairs and employment and chair of the 2005 OECD social affairs meeting, Aart Jan de Geus, Australia’s minister for family and community services, Kay Patterson, Germany’s federal minister for health and social security, Ulla Schmidt, Korea’s Geun Tae Kim, minister for health and welfare and co-chair of the 2005 meeting, and from the US, Wade F. Horn, who is assistant secretary for children and families at the DHHS.

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