Labor Market Policies and Differential Patterns of Unemployment in Sweden

The U.S. and Sweden differ sharply in unemployment levels and in labor market policies. During the 1970’s, Sweden experienced an unemployment rate of around two percent compared to a seven percent U.S. rate.1 In Sweden the central economic goal has been full employment. For over thirty years, Sweden has experimented with a wide array of labor market policies to promote full employment.2 Sweden’s experience with these programs offers U.S. policy makers the chance to evaluate their impact before implementing them in the U.S. labor market.