About the Nordic welfare model

The social policy areas in the Nordic countries are often identified with the Nordic welfare model.

Though different areas of social policies have been implemented in different periods in all the Nordic countries, the Nordic welfare model is often used as a collective description of modern welfare systems.

It is therefore a crucial focus point in the development of a comparative description of the social welfare systems in the Nordic countries. The following subjects sums up the characteristics when describing the Nordic welfare model.

Comprehensive public-sector responsibility for basic welfare tasks

Welfare policy is wide-ranging, and includes social security, social services, health, education and training, housing, employment, etc.

Strong government role in all policy areas

Political measures designed to encourage full employment are based on macroeconomic policy, social policy and an active labour market policy in which trade unions and employers play an important role as social partners.

Welfare system based on high degree of universalism

All citizens are entitled to basic social security and services, irrespective of their position in the labour market. This universalism contributes to broad public support for welfare policy.

Income security based on basic security for all

Income protection is based on two elements: most schemes provide income-independent basic benefits and an income-dependent benefit to those who have been in the labour market. Compared with other industrialised countries, public income transfers play a substantial part, for which reason the ratio of social expenditure to GDP has been high. There is considerable public financing or transfer incomes, and as such the level of taxation remains high.

Welfare model embraces the social and health sectors

The Nordic countries may also be characterised as service states in which local democracy plays an important part. Social and health services are financed by taxes, rather than high user charges. The aim is to meet the needs of all citizens. Local and regional authorities (including at country level) administer and often provide these services directly.

Relatively even income distribution

The income disparities in the Nordic countries regarding salary distribution and disposable incomes are small compared with other countries. There are no large gaps between the various income groups, and therefore the levels of poverty and differences in the standard of living are relatively low.

Equal opportunities and gender equality are a basic principle

In the Nordic countries, the rate of participation by both men and women in the labour market is high, and most families consist of two providers. Social measures are based on individual rights, which means that women are not financially dependent on their spouses.

Labour market participation

The labour market in the Nordic countries is typically well-organised and there is a high level of work participation in which tripartite cooperation is key.

Funding from taxation and redistribution

Although the basic principles of the Nordic welfare model still apply, it is becoming more and more common to apply user charges, instead of all welfare services being financed via taxes. The setting up of funds to finance pension schemes is also common.