Economic Crisis and Social Policy in Finland in the 1990s

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This paper discusses the social policy consequences of the exceptional economic decline in Finland in the 1990s. It asks what happened to the Finnish welfare state in these exceptional economic conditions, and consequent political problems. It describes Finland’s economic performance in a comparative perspective, studies how government(s) have defined the goals of economic and social policies, and examines how the opinions of the Finns concerning the welfare state have changed during the recession. It also looks at the welfare outcomes, focusing on income levels, income distribution, poverty and social and health services. The results suggest that Finnish households have suffered economic losses which are smaller than the decline in the GDP would predict. The findings show that equivalent income distribution and relative poverty levels have not changed during the recession. The income losses of the recession have been spread relatively evenly, and the redistribution of the welfare state has been an important tool. Finally, it is argued that the explanatory factors of the growth vis-a-vis the retrenchment of the welfare state (or the lack of it) are different. Once established, structures and institutions of the welfare state can work as powerful tools even when economic and political conditions are difficult.
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Uusitalo, Hannu
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UNSW Faculty
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