Since the institution of local employment agencies in the 1930s, and amid the climate of Keynesian policies, the State began to finance unemployment benefits.
[1] To have this effect, unemployment insurance had to have some features: It should not be paid unless the individual has the possibility to take on work during at least a minimum number of hours each week.
After 300 (or 450) benefit days, anyone who is still unemployed can obtain a place in the Jobb-och utvecklingsgarantin (Job and development guarantee) labor market program.
Some unions also promote collective complementary insurance to better cover the growing quota of unemployed who receive less than 80% of their previous wages.
Unions offer this benefit to counteract the stagnation of the maximum compensation level and the rise of unemployed average and high-earners.
The Swedish welfare state and its “active labour market policies” remained quite intact after the deep recession of the 1990s.
Swedish politician and leader of the Moderate Party from 1999 to 2003, Bo Lundgren,[4] claims the requirement for very intense job-seeking by the unemployed does not necessarily improve the system's functionality.
A report written by Lundgren,[4] in his position as head of the Supervisory Division of the Unemployment Insurance Board, argues that in a situation where there are often many job-seekers for each vacancy, the job-seeking activity should be limited to jobs where the applicant has a fair possibility of being offered the job.
The problems concerning the effects of joining a Swedish labour market programme have been examined by Barbara Sianesi,[5] who found several issues.
The Alliance for Sweden electoral coalition, who won the 2006 elections, endorsed each section of the labour market carrying its own costs of unemployment benefits paid out.
This was intended to put pressure on wage levels, increase demand for labour, and reduce unemployment.
They claimed a substantially larger portion of the costs for the insurance should be financed by individual fees of the involved workers, to stop the intra-fund solidarity mechanisms.