Page 45 - Bloomberg Businessweek July 2018

Bloomberg Businessweek July 2, 2018
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I The Thinning Swedish
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C Welfare State

S ● The system is under strain this year and 0.9 percent next year.

“We have money,” says Hanna Hedvall, who
from demographic changes and
the refugee crisis worked as a midwife in Solleftea’s maternity ward
for six and a half years. “We may not be able to
have specialist care across the country, but here
we are talking about rather simple things.”
When the maternity ward at a local hospital in Sweden, with a high birthrate and an aging
the Solleftea district of northern Sweden was population, has one of the biggest tax burdens
shuttered early last year, expectant parents had in the world, and the marginal tax rate can reach
no option but to brave a more than 100-kilometer 60 percent. The taxes are used to fund a system of
(60-mile) drive to the nearest alternative. That’s cradle-to-grave benefits that are among the most
why local midwives began teaching couples a new generous in Europe. Citizens are entitled to heavily
skill: how to deliver a baby in a car. subsidized health care, free education, including
A birthing course in response to leaner times university, and more than a year of paid parental
would have been unusual even in a cash-strapped leave—plus a pension when they retire. But in recent
country. But Sweden is in the midst of its longest years, a need for increased welfare spending has
economic expansion in at least four decades, coincided with a large influx of refugees. Sweden
and the nation’s state coffers are brimming. The has absorbed more than 600,000 immigrants over
government, which has posted budget surpluses the past five years, many from war-ravaged coun-
Edited by every year since it came to power, projects a tries such as Afghanistan and Syria. That’s a huge
Dimitra Kessenides
and Cristina Lindblad surplus of 0.7 percent of gross domestic product number for a country of 10 million people.