The Nordic Model: Capable of Responding to the Social Side of Crises and Sustaining Social Investment?

Among scholars and practitioners, Nordic countries are known for their comprehensive welfare states with universal high-quality services and an industrial relations model that fosters competitiveness, high wages and good working conditions. This explains why Nordic solutions are often highlighted as examples for European Union countries, especially in social and labour market policy (de la Porte and Palier, 2022). Yet, the Nordic countries also face short-term crises – like the COVID-19 pandemic, whereby sectors of the labour market were adversely affected – and longer-term challenges such as declining fertility rates – potentially undermining the quality of public welfare services. The key question is whether the Nordics have been able to successfully address these challenges, while maintaining a high level of growth, welfare and labour market integration. This paper examines how Nordic countries responded to challenges posed by the adverse labour market effects of the COVID-19 pandemic, as it stress-tested the welfare states. After that, we discuss whether there is (still) scope for social investment, focusing on early childhood education and care. We then assess whether the Nordic welfare model is resilient and if there are lessons to be learned for other countries in terms of governance and policy (see also de la Porte et al., 2023a).