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Changing Inequalities and Societal Impacts in Rich CountriesThirty Countries' Experiences$
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Brian Nolan, Wiemer Salverda, Daniele Checchi, Ive Marx, Abigail McKnight, István György Tóth, and Herman G. van de Werfhorst

Print publication date: 2014

Print ISBN-13: 9780199687428

Published to Oxford Scholarship Online: April 2014

DOI: 10.1093/acprof:oso/9780199687428.001.0001

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Increasing Income Inequalities and Changing Social Relations

(p.641) Chapter 27 Sweden
Changing Inequalities and Societal Impacts in Rich Countries

Johan Fritzell

Jennie Bacchus Hertzman

Olof Bäckman

Ida Borg

Tommy Ferrarini

Kenneth Nelson

Oxford University Press

From an all-time low around 1980, income inequality substantially increased, reflecting a strong rise in top incomes and income from capital, more recently also a widening gap between bottom and middle incomes. Behind this are the dual income tax system, established in the early 1990s, the introduction of earned income tax credits, and a diminished coverage of social insurance programmes, which widened the income gap between employed and non-employed during the 2000s. The benefit and tax systems became less redistributive and thereby contributed to increased income inequalities. Another important element is the deep recession in the early 1990s with skyrocketing unemployment and subsequent cutbacks in welfare provision. Income inequalities, however, increased first and foremost in the aftermath of the recession. The chapter finds no unambiguous trend in social, cultural, and political conditions corresponding to the increased inequalities. There is increased polarization for many indicators between different socio-economic groups.

Keywords:   income inequality, dual income tax, wealth, Sweden, top incomes, capital income, health, poverty, political participation, polarisation

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