Distributive Consequences of Risk Privatization: The Case of the Swedish Unemployment Insurance System

Abstract

Abstract The public unemployment insurance program in Sweden has retrenched in terms of its benefit generosity in the last three decades. As a response to this trend, in which an ever-smaller proportion of the previous income of unemployed persons is compensated by public unemployment insurance benefit, complementary income insurance schemes provided by unions have expanded rapidly in the last 15 years, currently covering one half of the working population. What does this change mean for people who need income protection upon unemployment and are more likely to find themselves unemployed or underemployed? By analyzing survey-based benefit recipiency data among retail workers who were unemployed in 2014, this article explores the outcomes of the multi-pillarized unemployment benefit provision system in Sweden. While public unemployment insurance benefit does not fully compensate for the income loss for the majority of retail workers, the promise of a complementary income insurance scheme seems to be illusory for many individuals as they repeatedly oscillate between precarious work and benefits, accompanied by the burden of navigating a complex system.