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Ethos Issue 3, Oct 2007
The Nordic Social Security Model:
Squaring the Circle?
Koh Tsin Yen
| NOTES |
| 01. |
Meeting with the National Directorate
of Labour, Denmark (5 December 2006). |
| 02. |
OECD Factbook 2006 (Paris:
Organisation for Economic Co-operation and Development,
2006). |
| 03. |
The replacement rate and duration
of UI benefits in both Denmark and Sweden are among the
highest in Europe. In Denmark, an unemployed person can
receive UI benefits for up to four years, at a maximum
replacement rate of 90%, subject to a cap. The average
replacement rate is 69%. In Sweden, an unemployed person
can receive UI benefits for 300 days, at a maximum replacement
rate of 80%, subject to a cap. The average replacement
rate is 63%. (Source: OECD Employment Outlook - 2006
Edition: Boosting Jobs and Incomes (Paris: Organisation
for Economic Co-operation and Development, 2006). Membership
fees are low; in Sweden, government funds covered about
90% of UI payouts, and membership fees only 10%. In Denmark,
membership fees covered 50% of payouts in 2005, but only
25% a few years ago, when unemployment rates were higher.
(Source: meetings with the Unemployment Insurance Board
in Sweden, 27 November 2006, and the National Directorate
of Labour in Denmark, 2 December 2006). |
| 04. |
Meeting with Dr Lotti Ryberg-Welander,
Stockholm University, Department of Social Work, 1 December
2006. |
| 05. |
The Global Competitiveness Index 2006
ranked Denmark second in higher education and training,
followed by Sweden in 3rd place. Finland took first place. |
| 06. |
Expenditure on adult training programmes
forms about 0.5% of Denmark’s GDP, and 0.3% for
Sweden (Nordic Social-Statistical Committee (NOSOSCO),
2006, Social Protection in the Nordic Countries 2004:
Scope, Expenditure and Financing, pg.227.). |
| 07. |
From the paper "Tax, Work and
Equality – a Study of the Danish Tax and Welfare
System," Rockwool Foundation Research Unit. |
| 08. |
Meeting with the Swedish Ministry
of Finance, 30 November 2006. |
| 09. |
Meeting with Dr Lotti Ryberg-Welander,
Stockholm University, Department of Social Work, 1 December
2006. |
| 10. |
"Sweden’s Growth Paradox,"
The McKinsey Quarterly, June 2006. Public sector employment
figures from Hans Werner Sinn, "Scandinavia’s
Accounting Trick," Project Syndicate 2006. |
| 11. |
Schubert, Carlos Buhigas, and Martens,
Hans, "The Nordic Model: A Recipe for European Success?"
(European Policy Centre (EPC) Working Paper No. 20, September
2005). |
| 12. |
Sources: Growth Competitiveness Report
2005, OECD Factbook 2006, UN Human Development Report
2005, and the CIA World Factbook 2006. |
| 13. |
Sources: Swedish Ministry of Finance,
Danish Ministry of Finance, Singapore Ministry of Finance
(Budget Highlights 2005), and OECD Tax Database. |
| 14. |
The top tax rate on labour income
was lowered to 20% in YA2007 from 21% in 2005. The headline
corporate tax rate lowered to 18% with effect from YA2008;
and the GST rate increased to 7% with effect from 1 July
2007. |
| 15. |
Tax on labour income includes payroll
taxes for Sweden and Denmark. For Singapore, CPF contributions
are excluded as they are not considered as part of government
tax revenue. |
| 16. |
In January this year, the Danish government
lowered the top CIT rate from 28% to 22%. |
| 17. |
There are reduced VAT rates for Sweden:
12% for food and hotel charges; 6% for personal transportation,
publications, entrance fees to commercial sports activities
and cultural events; and exemptions for healthcare and
other services. |
| 18. |
But an annual lump sum charge applies. |
| 19. |
Figures for Denmark and Sweden are
from the OECD Tax Database. The figure for Singapore is
based on an average wage of S$3,444 (Labour Force Survey
2005), and the employer CPF contribution rate of 20%,
employee contribution rate of 13%, $1,000 annual earned
income relief and the personal income tax schedule for
YA2006. |
| 20. |
From the paper "Tax, Work and
Equality – a Study of the Danish Tax and Welfare
System," Rockwool Foundation Research Unit, 2006. |
IIII |
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