Welfare State Restructuring and Child Care in Sweden

The 1990s was one of the most critical periods for the Swedish welfare model. The employment rate fell dramatically and unemployment soared to levels unthinkable since the 1930s. ¹ The situation began to improve only as the decade came to an end. The employment crisis, in turn, produced an accelerating public sector deficit, with revenues plummeting and public expenditures skyrocketing. ² In addition to the economic crisis, there were also other factors that constituted a challenge to the stability of the traditional Swedish welfare state. First, the Social Democratic Party lost its historically dominant position, which opened the way for neoliberal ideas of marketization and privatization. The internationalization of capital markets and financial transactions, plus Sweden’s participation in the European integration project, also posed new challenges.