ABSTRACT
Chronologically speaking, Finland has been a latecomer in the field of social policy, particularly in social insurance (Alber 1982; Alestalo et al. 1985). However, chronological tardiness was compensated by an extension of the reforms and Finland came to develop a universal model of social protection earlier than most other European countries (Kangas and Palme 2005). In Finland, the struggle over the welfare state was between the two main political forces, the Social Democrats (SDP) and the Agrarian Party (ML, and since 1966 the Centre). On the SDP agenda, adequate income loss compensation was given priority, and the strategy was concerned with insurance for workers and not particularly with the other socio-economic groups. On the ML agenda, universal flat-rate benefits were prioritized. National insurance covering the total population, including unpaid agricultural family workers and providing flat-rate benefits were more preferable for the rural population than income-graduated allowances. This political dualism is reflected in the institutional set up of the Finnish income transfer system. All major ‘basic security benefits’ are administered by the public authorities, mainly by the Social Insurance Institution (Kela), while all employment-related – with the exception of sickness insurance which is under Kela – benefits are organized via the labour market. Up to the late 1950s the Agrarians had an upper hand in Finnish politics and the
precedence of social policy reflected that situation. From the late 1950s onwards, the emphasis shifted towards industrial workers’ interests. In 1959 unemployment insurance was reformed to be more income-related, in 1961 the employment-related pensions system was established and universal sickness insurance was implemented in 1963. Since the 1970s the state and municipalities have invested heavily in facilities for child
care and care of older people. The controversies between the bourgeois, vis-à-vis SDP, orientations played a role here as well. In contrast to many other countries, the need for child day care bifurcated on the one hand into municipal day care centres – which the political left demanded – and on the other hand into home care allowances – which was the bourgeois preference – a kind of cash compensation for the families that do not use public day care.
