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Growing inequality poses challenge for Nordic welfare model

In the Nordic countries, we pride ourselves on being welfare states which are global leaders when it comes to equality, and we expect the state to redistribute wealth for the benefit of the least well-off in society. However, in recent years, inequality has grown, and this has challenged the notion of the Nordics as leaders.

Kjetil van der Wel is a professor at OsloMet and has overseen the project ‘Welfare state life courses: Social inequalities in the co-evolution of employment, health, and critical life events (WELLIFE)’, part of the call Nordic Register-based Research Projects. The researchers in this project have investigated the reasons for the increase in inequality in the labour market and the field of health.

“Income inequality in the Nordic Region is higher now than it was in the 1980s. Historical studies show that after WWII, inequality fell in tandem with the establishment of the welfare state. This positive trend then reversed, and we’ve seen inequality grow, especially since the turn of the millennium. Sweden has actually seen the sharpest increase in income inequality in the world. That says something about the changes we’re seeing right now in our Nordic welfare society.”

“We expect a lot of our Nordic welfare society because we’re among those that have gone the furthest when it comes to wealth redistribution, with the aim of not just helping those groups that are worst off, but also raising the bottom as much as possible. Before we embarked on our research project, there had already been a number of worrying reports from other researchers and the Organisation for Economic Co-operation and Development (OECD), which was looking at income inequality and health inequality. They concluded that there is no less health inequality in the Nordic countries than elsewhere in Europe,” says Kjetil, and adds:

“It’s important to find the reasons for the growth in inequality because the Nordic governments are keen advocates of the Nordic welfare model and claim that what we’re seeing right now is an undesirable development.”

Portræt af Kjetil van der Wel.
Kjetil van der Wel is a professor at OsloMet. He is project leader of: "Welfare state life courses: Social inequalities in the co-evolution of employment, health, and critical life events (WELLIFE)".

The Nordic paradox

WELLIFE is an interdisciplinary team that includes demographers, physicians, sociologists, and health sociologists. The project involves researchers from Norway, Sweden, Finland, and Denmark who between them have published 33 research articles that shed light on social inequality.

“The economic sustainability of the Nordic welfare states hinges on the inclusion of traditionally weaker groups in the labour market. These groups include people with impaired health, short education, immigrants, women and the oldest and youngest of working age. We know that social inequalities in health have grown in recent decades and are now on a par with other European countries with far less advanced welfare models. This is referred to in research literature as a Nordic paradox.”

We often praise our Nordic welfare systems. Aren’t we already a world leader in the prevention of social inequalities?

“Absolutely. Although I see no reason to paint a gloomy picture of the current state of the affairs, we’re coming from a situation where the Nordic states have implemented major initiatives in relation to social security and redistribution, and now a new shift has occurred. Even if the trend isn’t dramatic and our standard of living remains unusually high here in the Nordic countries, we should keep an eye on the changes which suggest that we’ve moved some distance away from the original purpose of the Nordic welfare state.”


Changes in life expectancy and lifespan variability by income quartiles in four Nordic countries: a study based on nationwide register data.
Brønnum-Hansen H, Östergren O, Tarkiainen L, Hermansen Å, Martikainen P, van der Wel KA, et al.

Exploring the longevity advantage of doctorates in Finland and Sweden: The role of smoking- and alcohol-related causes of death.
Junna LM, Tarkiainen L, Östergren O, Jasilionis D, Martikainen P.

Joint exposure to parental cancer and income loss during childhood and the child’s socioeconomic position in early adulthood: a Danish and Norwegian register-based cohort study.
Klinte M, Hermansen Å, Andersen A-MN, Urhoj SK.

Contributions of specific causes of death by age to the shorter life expectancy in depression: a register-based observational study from Denmark, Finland, Sweden and Italy.
Korhonen K, Moustgaard H, Tarkiainen L, Östergren O, Costa G, Urhoj SK, et al.

Home and away: mortality among Finnish-born migrants in Sweden compared to native Swedes and Finns residing in Finland.
Östergren O, Korhonen K, Gustafsson N-K, Martikainen P.

Gestational Age, Parent Education, and Education in Adulthood.
Bilsteen JF, Alenius S, Bråthen M, Børch K, Ekstrøm CT, Kajantie E, et al.

Unemployment from stable, downsized and closed workplaces and alcohol-related mortality.
Junna L, Moustgaard H, Martikainen P.

Adolescent Mental Health Disorders and Upper Secondary School Completion – The Role of Family Resources.
Jensen MR, van der Wel KA, Bråthen M.

Interdependent pathways between socioeconomic position and health: A Swedish longitudinal register-based study.
Rehnberg J, Östergren O, Esser I, Lundberg O.

Social background hugely important later in life

Kjetil van der Wel emphasises that although much of the population is well off, there are groups at risk of exclusion, and these are mainly people from low-income families and those who experience critical life events, serious illness, or unemployment. According to Kjetil, it’s the long-term exposure to poor living conditions that’s most worrying, and the project results show that it’s often the same groups that are affected. This means that the more of the above groups one finds oneself in, the more difficult it is to get back into the labour market.

“We’re also discovering that social background and the family’s resources count for a lot in terms of how things go later in life. If life-critical incidents occur, a resourceful family can serve as a protective factor. In families with a higher income, the consequences will therefore have less of an impact. The welfare society has tried to break the link between family and one’s own health and well-being as an adult, but it’s difficult to avoid it completely,” he says.

Is a society without socio-economic differences the ideal?

“The goal of a welfare society isn’t to achieve complete equality in outcomes, rather the focus is on ensuring equal opportunities for everyone. So, if you’re in poor health or you grew up in a family with few resources, that shouldn’t be a hindrance to you. It must be possible for those who want to, to get an education and a job. This then implies that there must be a reward, and a certain difference in income will be perceived as fair for many, but when the differences become too great, that can become a problem,” Kjetil says and adds:

“It isn’t easy to point to any one person who is responsible for reducing inequalities. It isn’t only the responsibility of politicians because employers also play a role in hiring people with different circumstances. The health professions also have a responsibility to help in terms of everything from pre- and post-natal care, schooling, and services for those with psychological conditions. That’s why it isn’t easy to place all of the responsibility on one person’s doorstep, rather it’s clear that politicians have a special responsibility, and because many of the welfare institutions are politically controlled, it’s also the politicians who shape social security.”


Maria Nilsson

Maria Nilsson

Special Adviser
Marianne Knudsen. Photo: NordForsk

Marianne Knudsen

Senior Communications Adviser