The Swedish unemployment experience

Lars Ljungqvist, Thomas J. Sargent

    Research output: Contribution to journalArticle

    Abstract

    Since the 1960s, Sweden has sustained a remarkably low unemployment rate while the average duration of unemployment spells has been increasing over time. This pattern is reproduced in an equilibrium search model incorporating progressive income taxes, generous unemployment compensation, and a program for preventing unemployed workers from abusing the system. Our analysis raises concerns about how well the Swedish system is equipped to handle the current situation of high unemployment.

    Original languageEnglish (US)
    Pages (from-to)1043-1070
    Number of pages28
    JournalEuropean Economic Review
    Volume39
    Issue number5
    DOIs
    StatePublished - May 1995

    Keywords

    • Progressive income taxation
    • Search model
    • Sweden
    • Unemployment
    • Unemployment compensation
    • Welfare state

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

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