During recent decades, the Swedish welfare state has weathered several crises, while its economy and public finances still perform strongly. However, the ways in which it is governed has transformed substantially since the 1990s. This chapter focuses on the processes of re-regulation and recalibration that Swedish social policies have undergone since 1995, focusing specifically on funding and administration and overall performance in such areas as pension policy, labour market and unemployment policy, education policy, healthcare and family policy, housing, social assistance, and migration policy. We argue that through mostly incremental implementation of privatisation, financialisation, and administrative overhaul, Sweden was led to the top rankings in inequality and segregation in the developed world.

This paper examines the challenges to the Swedish welfare state after the credit crunch of 2008 focusing on several major challenges: the government’s reaction to the fiscal and economic crisis and its outcomes, the (re)balance of welfare policies addressing risks and opportunities. While the situation is almost excellent from a purely fiscal point of view, the outstanding private debt, unemployment, especially among youth, pressures on the pension, health and education systems are prominent concerns. They have led to the revitalization of the social investment paradigm, strict budgetary policies, increased number of welfare-to-work programmes and focus on using tax reductions as a means of stimulating the labour market. In this context, the main demographic concerns and social integration have come to the fore to an unprecedented extent.

The welfare of the people is an ancient political norm, much older than citizenship and civic rights. Modern social rights did not, as a rule, develop as citizens' rights, but as rights of classes and of other social categories. Despite the widespread politics of anti-welfare, social welfare has grown in various political contexts and forms. In the last quarter of the twentieth century, social policy became the focus of a vast body of international, comparative research in sociology and political science. The overall trajectory of this still-expanding scholarly enterprise may be outlined in the shape of three generations of investigation, each with a characteristic empirical focus and geopolitical orientation, and set in a specific socio-historical context.