The Nordic Welfare Model: Why There is Less Poverty in Scandinavia


WASHINGTON, D.C. – The Nordic countries (Denmark, Norway, Finland, and Sweden) have some of the lowest rates of poverty in the world. The Organization for Economic Co-operation and Development (OECD) measures poverty as the percentage of the population who make less than 50 percent of the median income. Here are some of the poverty rates of OECD countries as of 2010/2011:

Australia – 14.4 percent

Canada- 11.9 percent

Denmark – 6 percent

Finland – 7.3 percent

France – 7.9 percent

Germany – 8.8 percent

Mexico – 20.4 percent

Norway – 7.5 percent

Sweden – 9.1 percent

United Kingdom – 10 percent

United States – 17.4 percent

The Nordic states are societies based on a set of morals and values that put emphasis on social cohesion and equality. Nordic policies are based around the idea that there should be equal opportunities, social solidarity and security for all members of the population. They focus on economic equality and gender equality; some have criticized the Nordic countries for not also valuing racial and ethnic equality. However Sweden’s recent offer to provide permanent residency to Syrian refugees to enter maybe debunk this theory.

Part of the reason the Nordic states have greater health, greater happiness and less poverty is they have a strong welfare state with well developed social safety nets. However, not only do the Nordic nations top the charts in health and happiness they are also some of the most economically competitive countries in the world. One might know them for sleek and affordable furniture, but they also created Angry Birds and “The Killing.”

Nordic Welfare states are based on the belief everyone should have equal rights and access to healthcare, social services, education and culture. In Scandinavia, the government not only provide people with the resources to make sure they have all the basic necessities, they need they also provide people with the skills and abilities needed to become fully functioning members of society.

For example, the Nordic states have made it gender equality in the workplace a priority. Many women do not work because of family responsibilities and the high cost of childcare. In the Nordic states childcare is covered, as is homecare for the sick and the elderly. This means that women who may have had to stay home to care for their families can go to work.

However, people often do not realize this is good for the economy; when the entire population can work full-time, the economy grows. While these nations once had extremely high taxation rates and very high government spending, they have reformed their taxation policies and veered politically to the right. They have been able to do this however without losing their essential health, education and social programs.

The new Nordic model has succeeded in combining the best of capitalism and of socialism; this can be seen in both their business and economic successes and their strong public sector. The Nordic model is not perfect; it has high taxation rates and experiences “brain drain” as educated young professionals leave for countries with lower tax rates. However, European and North American countries should look to the Nordic Model if only for ways to tackle poverty and inequality.

– Elizabeth Brown

Sources: OECD, Inequality Watch, The Economist, Norden
Photo: Group Leisure


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