Institutionalizing suspicion: Tracing the decline of the Swedish sickness insurance system in the 2000’s

Abstract

This article presents an analysis of Swedish sickness insurance in the 2000’s, outlining cultural and structural shifts in political and institutional design. The study is based on analytic dualism and Margaret S. Archer’s morphogenetic model, which is used to create an analytical narrative focusing on political and institutional developments. The narrative identifies two distinct phases: one period of rapid cultural and structural change (morphogenesis), and one of institutionalization of the new structure (morphostasis). The narrative describes how a key element of the Swedish welfare state, sickness insurance, underwent a transition from an encompassing and generous to a strict and suspicious system, and how this was effectively solidified politically and organizationally. This is related both to a broader shift toward neoliberal and workfare policies, and to the specific socio-cultural and social interactions between agents to reform the system. The analysis provides a contribution to the literature by providing an internationally relevant empirical case of how an encompassing system has undergone a period of substantial decline, and by presenting a coherent long-term narrative which temporalizes this development into specific timepoints and phases.

Keywords:

• Analytical dualism
• sickness insurance
• policy study
• workfare
• neoliberalism

Introduction

Over the last decades, there has been a trend of welfare state retrenchment across many Western countries (Korpi 2003; Pierson 1996; Scruggs 2006; Scruggs and Ramalho Tafoya 2022; Starke 2006), coupled with workfare-oriented reforms (Kananen 2012; Peck 2001), and social democratic systems are no exception. Sweden, given its successful and popular welfare state, presents itself as the least likely case where large-scale retrenchment would take place, and in the early 2000s, it was deemed unlikely that Sweden would change path given its successful reputation in the international community (Cox 2004). In the 1990s, the Swedish welfare state was a highly institutionalized system internationally renowned for being both generous and financially purposeful: the International Monetary Fund described Sweden as “epitomizing a particular approach to economic and social policy” and as “the bumblebee that somehow manages to fly” (Thakur et al. 2003:xi). One key aspect of the Swedish system was its encompassing social security system, with generous benefits and a high level of decommodification (Esping-Andersen 1990). The welfare state and the comparatively large public sector was further highly popular among the Swedes (Svallfors 2016). Two decades later, Sweden looks very different: an editorial in the Lancet (2023) expressed concern about the country’s widening economic inequality gap and the welfare system has gone from one of the most generous in the world to being considerably more restrictive (Scruggs and Ramalho Tafoya 2022; Therborn 2020).

Being a common reference point of an encompassing welfare state in comparative research, it is important to describe Sweden’s demise, and to explain how this change came about. The changes are perhaps most prominent in the sickness insurance system, which was heavily reformed in the 2000s with the introduction of time limits, harsh work ability assessments and standardized procedures. As such, sickness insurance during this period is an illustrative case for understanding what has happened to the Swedish welfare state.

This article aims to present an analytical narrative over Swedish sickness insurance during the 2000s, using analytical dualism (Archer 1995) as an analytical strategy. The narrative is constructed analytically by defining points of cultural and structural changes in sickness insurance politics and the governance of and organizational developments in the Swedish Social Insurance Agency (SIA). The aim is both to describe the overall direction of the development, and to offer a detailed analysis of policy changes and the various social interactions that has driven them.

This article provides an original contribution in three respects. Firstly by collating previous research, government reports, policy documents and political debates into a coherent long-term narrative, with a timeline that goes beyond previous studies in the field (Börjesson 2018; Johnson 2010). Specifically, the period after 2015 has not been included in previous international research with long-term approaches, which is a period that has been marked by very harsh policies (Altermark 2020). It is therefore relevant to analyze how this period relates to previous developments of the system.

Secondly, since surprisingly much of the research on Swedish sickness insurance is only reported in Swedish, there is a value of presenting this research for an international audience; given the salience of the Swedish welfare state in the literature, its decline has an international interest. While there are examples of studies that reports on the neoliberalization of the Swedish system (Kananen 2012; Scruggs and Ramalho Tafoya 2022; The Lancet Regional Health – Europe 2023; Therborn 2020), detailed studies of this development in the sickness insurance system are lacking in English.

Thirdly, the article adds a theoretical perspective which makes sense of this narrative by identifying specific points where cultural and structural shifts have occurred, which agents that promoted them, and with what consequences. There are examples of how such developments have been traced in relation to ideological shifts toward neoliberalism (Therborn 2018; Wacquant 2010; Börjesson 2018; Johnson 2010), and particularly in the political sciences there are several potential theoretical frameworks that could be used for such an analysis, e.g., the Advocacy Coalition Framework (Sabatier and Weible 2007), focusing on ideas as “coalition magnets” (Béland and Cox 2016), or institutional approaches (e.g., Pierson 2000; Schmidt 2008). In this article, Archer’s (1995) analytical dualism was used to give the analysis a sociological framing, explaining change and stability through the interactions between structure, culture, and agency. Analytical dualism integrates these analytical levels into a broader theory of societal development. While previous research has focused on coalition-building and public philosophies to describe an overall development (Börjesson 2018; Johnson 2010), the current study adds a temporalization of these developments. By using Archer’s idea of structure, culture, and agency operating diachronically over time, where structure and culture predates action, and action spurs structural or cultural elaboration (or foster stability), an analytical narrative can identify specific timepoints where important elaborations occur, and study how these changes take place through both structural and cultural conditioning and social interactions. This temporalization also helps the identification of different phases that are marked by either change or stability.

Analytical strategy

The analysis starts from Archer’s (1995) idea of analytical dualism, i.e., the position that structure and agency need to be analyzed both separately and in which ways they interact over time, and her morphogenetic model which lays out how this process is to be understood. The model allows for describing narratives of structural change where human action, through interactions and human reflexivity, influence how and to what extent such structures develop over time, which either change or are reproduced (morphogenesis vs. morphostasis). For such an analysis, structure, culture, and agency among various stakeholders are the building blocks:

Basically, Structure must be incorporated since all human relations are context-dependent, given there is no such thing as contextless action; Culture, since all such relations are concept-dependent, because those involved must have some idea of what they are doing; and activity-dependent because no form of social stability or change could ensue without some agents doing or not doing certain things. (Archer 2021:330)

For Archer (1995, 1996), structure denotes material and institutional orders which condition human actions, and which are emergent from social interactions. Culture is based around ideas, and there is a “library of ideas” which can be utilized or developed given that there are proponents of them at a specific time and that these proponents have the resources to promote them. Agency is the key to promoting changes to structure and culture and is based on the collective mobilization of people into agents. In Archer’s terminology, “agent” exclusively refers to collectives, where agents who are organized based on their interests are collectively referred to as corporate agents. Primary agents denote unorganized groups who lack a collective voice; although they share a similar social position they react to situations in an atomistic way, as individuals. Agents hence have varying levels of social resources, specific sets of cultural ideas, and interests which they will strive to pursue, where their level of organization is crucial for their success.

In analytical dualism, structure, culture and agency are related, but needs to be analyzed separately. The morphogenetic model (Archer 1995, 1996) is utilized to make sense of their various interactions by temporalizing changes to structures and culture, determining specific time points where it is reasonable to argue that substantial cultural and/or structural shifts have occurred, and based on these, to outline the relevant social interactions that have promoted cultural/structural elaborations. The analysis results in an analytical narrative with specific timepoints, starting in the originating culture or structure (T1) which conditions human action, via socio-cultural or social interactions (T2-T3), and the resulting cultural or structural elaboration or reproduction (T4). The resulting T4 then becomes a new T1, and a new analytic sequence can take place (Figure 1).

Figure 1. Archer’s (1995:323) morphogenetic sequence within the cultural and structural domains, and their interactions over time.

This model is equally applicable to analyses of the development of ideas (i.e., culture) and structures, which makes it useful for understanding broad socio-political developments as well as changes within specific and practice-oriented sub-systems. As illustrated in Figure 1, the cultural and structural morphogenetic processes should be studied separately, but an analysis also needs to be attentive toward their interactions: cultural morphogenesis (or morphostasis) may spur a structural ditto, and vice versa. The analysis will describe a cultural morphogenic process which began in the early 2000s, followed by a structural morphogenic process affecting legislation and the institutional structure of the Swedish sickness insurance system.

Analytical steps

The analysis will be performed according to analytical steps outlined by Archer, which are different for analyses of culture and structure. For the analysis of culture (including policy development), focus is on ideational struggles and the interests that are attached to them, and the analysis proceeds through four steps (Archer 1996):

1. Describing the relevant parts of the cultural system and the logical relationship between ideas, i.e., to which extent they are compatible or contradictory. An analysis of a cultural system can never be complete and should therefore start from the ideas that have proponents at a given time (T1), since this is the condition for the ideas to have a causal influence on agency. This includes mapping different political ideas related to the empirical problem, i.e., sick leave and sickness insurance, and how they relate to one another.

2. Analyzing the causal influence of the cultural system on socio-cultural interactions, i.e., the situational logics related to adopting and arguing for a specific position. The primary strategy is then, for a person who defends the idea A, to argue that it is in an apparent contradiction to idea B. An alternative strategy, if this fails, is to try to reinterpret B so that it is consistent with A, or, as a last resort, try to reinterpret both A and B as an attempt at compromise. Here, focus is on how the ideas identified in the first step are used in different lines of arguments in struggling to define the political agenda.

3. Analyzing the actual socio-cultural interactions between agents, which includes why specific ideas are put forward at a certain time, and by whom. This step focuses on how discursive struggles are socially organized, and how social struggles are culturally influenced. It relates to the use of cultural and political power and the mechanisms involved when actors work to maintain or change specific socio-cultural orders, i.e., the causal relations between individuals and groups at the socio-cultural level. Here, political mobilization is an important area of study, and the analysis follows how these interactions develop over a period of time (T2-T3).

4. In the fourth step, the analysis returns to the cultural system and in which ways the socio-cultural interactions have changed the logical relationships between ideas or whether they have introduced new ones (T4). This step describes the new makeup of the cultural system as a consequence of the T2-T3 interactions, including which ideas that dominate, and to which extent agents’ influence over the agenda has changed.

The analysis of the subsequent structural change builds on Archer’s approach to structural morphogenesis, seeing societal structures as emergent and dependent on the interactions between structure and agency over time (Archer 1995). This approach is applied in three analytical steps following the same morphogenetic sequence:

1. Describing the structure at the starting point (T1). Societal structures precede agents’ actions by defining the situations and the resources available to specific individuals. The structure conditions their actions and creates opportunity costs for those who act contrary to the structural conditioning. This can be seen in political decision-making, where the political and institutional structure limits the possibilities for action or raises the stakes for certain decisions. This step outlines the institutional design of the sickness insurance system at the analytical starting point.

2. Analyzing the social interactions over a period of time (T2-T3), focusing on how agents’ actions are related to preceding structures and in which ways they align with or counteract such conditionings. This focuses on how different agents interacted to promote regulatory and organizational changes to the system, and how they were implemented.

3. Describing the resulting structural development (T4). The interactions between agents will influence structures either in morphogenic or morphostatic ways, i.e., structural development or reproduction. In the analysis it will be argued that once the morphogenetic sequence was completed, a period of institutionalization followed, which is analyzed as a second sequence with a morphostatic character. The analysis proceeds with discussing the consequences of these social interactions and how they have affected different agents’ positions and agency (double morphogenesis), as well as their social identities through engagement in collectives (triple morphogenesis). This includes political agents, the SIA, as well as people applying for sickness benefits.

Materials

The materials used to build the analytical narrative consists of a combination of secondary sources (previous research about Swedish sickness insurance) and primary sources (reports and documents from the government, state authorities and other stakeholders). These are collated into a timeline which describes the cultural and structural changes starting at the turn of the twenty first century, ending in 2022. Secondary sources have been used to describe the overall development, while primary sources have been used to illustrate or strengthen specific points not explicitly covered in previous research.

The selection of sources is based on their explanatory value for the analytical narrative, where a criterion has been that they describe either political struggles over sickness insurance, or organizational changes to the insurance system. The political level is relevant for tracing the cultural ideas in this field, how they logically relate to one another, and how the agents who are promoting specific views have interacted. The organizational level is relevant for tracing changes in identity and role perceptions among SIA staff, which indicates whether a cultural shift has occurred in the administration of sickness insurance. Sources that describe different agents’ roles and perspectives at various times have been sought, which placed in the timeline allows for an analysis of how such perceptions have developed.

Results

The T1 of the cultural analysis is around the turn of the twenty first century, which is a time where the sickness insurance system was well-established, organized through regional insurance funds with an overarching state authority to coordinate the application of the law. Even considering restrictions made in the 1990s, the system was at this point relatively generous, and the main corporate agent in defining both causes for sick leave and how the system should be organized was, broadly speaking, the labor movement (including unions and the Social Democratic Party). The sickness insurance system was at the time not a major point for political controversies. From the mid-1990s to the early 2000s, however, sick leave numbers began to rise quicky, which spurred an increased debate around causes and solutions to the problem (Johnson 2010). This is also the point where the system began to change. For an overview of sick leave rates and significant events in the development of the system in the 2000s, see Figure 2.

Figure 2. Sick leave rates (net compensated days per person and year, excluding the first 14 days which is paid by employers) and changes to sickness insurance policy and administration.

Cultural morphogenesis: establishing sick leave as a social problem

The first analytical step involves mapping the different cultural or political ideas that were championed at the start of the analytical narrative. Johnson (2010) describes a shift from one explanatory model (work environment) to another (over-utilization, moral hazard and fraud) which led to changes in policy and legislation. He argues that sick leave became a major social problem in the early 2000s; the media coverage of the issue grew and became more politicized from 2000 to 2001, peaking around 2005, followed by a slow decrease in attention. While sick leave had previously been debated from time to time with various stakeholders representing different points of view, there was a relative consensus around poor work environments as the main cause for sick leave, illustrated through the proposed solutions to the rising sick leave rates, including incentives to employers to improve work environments and rehabilitation services. Employers were generally seen as the culprits, especially since the recession in the 1990s which resulted in severe cutbacks to the public sector with negative impact on the work situation for health care and municipal workers. Sick leave was considered a structural problem, and the main agents in promoting this explanation were unions, physicians, the social insurance administration, the media, and politicians (independent of party), with employers placed in a defensive position. While employers certainly qualified as a corporate agent, they were at the time an agent working against the headwind. The consensus was strong, and the opposing voices were few and not very loud.

The opposing idea of over-utilization was not a new one; it had been an argument for increasing the self-risk in the insurance system through waiting-days, and had been promoted by employer organizations at least since the 1970s (Lindqvist 1990). Hence, the shift in the debate was not driven by the introduction of a new explanation for sick leave, but that an existing idea in the “library” of ideas, i.e., the cultural system (Archer 1996), was given a new prominence and managed to push out the existing explanatory model related to poor work environments. These two ideas are not necessarily contradictory from a logical point of view: it is possible that some people get ill from poor working conditions while others cheat the system. From the first step of the analysis, we can therefore conclude that the ideas are not logically inconsistent; rather, the shift is related to the strategies used or the material interests of the various agents.

The second analytical step identifies the causal effect of the ideas on socio-cultural action. During this time, the idea of over-utilization was argued in a new way, with the strategy to discredit the work environment explanation in favor of the opposing idea. Johnson traces the emerging shift as beginning with opinion pieces in news media, especially the daily Dagens Nyheter, where the notion of over-utilization was introduced to explain differences in sick leave patterns between different Swedish regions (Johnson 2010). Around the same time, the Confederation of Swedish Enterprise conducted a survey of attitudes which indicated that people thought sick leave was accepted also for some non-medical reasons, such as family problems or stress. Specific groups were singled out as having particularly bad attitudes, including women with alleged burnout symptoms, people in northern Sweden, and the unemployed who were assumed to prefer the sick leave system because it had higher benefits than unemployment insurance. The debate centered around medicalization, i.e., that problems related to private life or to unemployment were expressed as illness, and physicians were accused of lax sick leave practices. The notion of “cultural diseases” were introduced as a label for non-medical problems expressed in medical terms (Lindqvist 2019). A stricter definition of sickness was taken as a starting point for criticizing sick listing practices (Johnson 2010). Other media followed, and a discourse on sick leave developed around the new explanatory model. Sick leave was suddenly depicted as an epidemic based on poor attitudes.

To address the debate, the social democratic government issued a political goal to halve the sick leave rates and introduced restrictions to harmonize the benefit levels with the unemployment insurance; further, several people were in this period granted disability pension which lowered the number of people on sickness benefits. Another response was to issue a new government report to explain the development and suggest new policies, led by a previous social democratic minister for social insurance. The resulting report (Swedish Government 2006), published shortly after the 2006 election that the social democrats lost to a center-right government, became a milestone in establishing the over-utilization discourse as a new policy orientation. Accompanying the work with the report, a public campaign was launched to affect the public’s attitudes to sick leave, and a series of working papers were published with an explicit purpose to build opinion around social insurance issues. Johnson shows how these were heavily based in the over-utilization discourse, commonly without any empirical support to back up the claims made. The final report makes no mention of previous government reports on the issue, which indicates a clear shift in tone: the report strongly argues for a stricter insurance system where the work principle is emphasized.

From the second analytical step, we can conclude that the proponents of the over-utilization idea used a strategy where they wanted to de-legitimize the work environment explanation and declare it false, i.e., arguing for an apparent contradiction between it and their rivaling explanation. The two explanations did co-exist for a brief moment, and partly overlapped in stakeholders’ arguments, but after 2004, they were treated as distinct ideas which in the hands of rivaling agents became competing explanations with very different policy consequences (Börjesson 2018). It was in the interest of these agents to argue against the other explanation, implying a causal link between the ideas and corporate agents’ material interests (Archer 1996). The defense was initially built on attempts at reconciliating the two explanations, and finally by a rather sharp defeat where the social democratic government adopted the new explanation as a basis for policy reforms.

In the third analytical step, we need to examine the socio-cultural interactions and describe how this shift happened. The breakthrough seems to have been driven by coinciding interests among different agents. Employers managed to build advocacy around the new explanatory model by (non-formalized) coalitions with other corporate agents such as (some) physicians and opinion journalists. This spread into the political realm, where the shift was strengthened by engaging other bodies of research (primarily economics) into a field previously dominated by studies on work and health (Ståhl and Seing 2018). Through incorporating these explanations and theories into government reports, it became possible to also influence the development of new policies. After a few years of intense lobbying, employers were no longer considered scapegoats for high sick leave rates, a role which had now been transferred to overly generous physicians and citizens with questionable work ethics.

Johnson (2010) scrutinizes the different explanatory models using empirical data and finds both explanations wanting; while both have some merit, none of them could explain the rapid rise in sick leave numbers at this time. Rather, he shows, the rise was mainly due to sick leave spells becoming longer, which discredits both the idea of a lot of people suddenly going on sick leave and work environments creating more illness; rather, the issue seems to have been a case of failed rehabilitation. He makes a case for how the shift was driven by a claims-making or problem definition process where the claims were closely related to the material interests of specific groups, i.e., the liberal press and employer organizations.

In a thesis about this development, Börjesson (2018) argues that the change was mainly ideational and gradual rather than sudden or based in material interests. The shift, according to Börjesson, was characterized by a changing perspective on the relationship between the state and the citizens, from seeing citizens as active subjects whose freedom and emancipation should be supported by a state guaranteeing their independence from the market, toward a moral-paternalistic model seeing citizens as capable of having moral flaws, and where the state should function as an institution to change individuals’ behaviors. Börjesson places the starting point for these shifts in expert reports commissioned by the state around 2000, where ideas of moral hazard were being addressed. At this point, these were still fringe ideas which did not lead to policy changes, but as they became debated – politically and through the media – they induced a broader shift through the recognition that individuals can act in morally questionable ways, and this shift took place in broad consensus across party lines. Börjesson argues that this was a change of public philosophies accepted by a broad set of agents, where once such ideas are accepted, they serve as cognitive locks and creates ideational path dependency. It could however be argued that the shift had its pre-history, where agents historically had represented their positions which could be placed on a left-right continuum, but that a consensus around the more leftist model was in place until a policy window opened, after which the consensus shifted toward the position of the right (Johnson 2010). If so, the shift would still be driven by material interests, but sick leave had to be reconstructed as a social problem based on a new explanatory model for a new consensus to be arrived at. While some agents, primarily the trade unions and the Left Party, maintained critique against the new ideas and policies, the general shift happened across the political scale.

In the fourth step, we end up with a revised cultural system (T4) caused by socio-cultural interactions in the T2-T3 period (roughly between 2001 and 2006), where the dominant ideas had shifted in favor of the new explanatory model. This was then translated into a structural morphogenesis by affecting policies and legislation (detailed below), and also resulted in a double morphogenetic process where agents (primarily politicians) came to accept and even advocate the new discourse. This was most palpable among social democrats who became agents for a cultural and structural shift which went against their previous convictions. Some of the policies were later implemented by a right-wing government, with weak opposition from the social democrats because the cultural shift had occurred also within their ranks.

To summarize, the cultural morphogenesis outlined above implied that the T1 – characterized by a consensus around the work environment explanation to sick leave and a strong influence from unions and welfare institutions in defining the issue – was transformed through intense socio-cultural interactions (T2-T3) dominated by opinion journalists in coalitions with employers and other agents, resulting in a T4 where the cultural notion of over-utilization was established as the new consensus (see Figure 3). This resulted in a new cultural T1 which in the following years induced several structural changes which came to strengthen the newly established discourse even further.

Figure 3. Cultural and structural morphogenesis (2000–2010) and morphostasis (2010–).

Structural morphogenesis: reforming the system

The first analytical step in analyzing the structural changes to the sickness insurance system is to describe the originating structure at T1. The sickness insurance system was established in 1955, replacing a voluntary system organized by the labor movement from the late nineteenth century onwards (Lindqvist 1990). A state-organized compensation system was introduced which made sickness insurance obligatory and differentiated based on income. In the process leading up to establishing a state system, labor unions and the labor-organized sickness funds were what Archer (1995) would call an emerging corporate agent, based in the material interests of the working class and a counter-reaction to the expansion of capitalism.

From the 1960s to the 1980s, the system was gradually expanded and grew more generous, professionalized, and bureaucratized. While there were initially some political conflicts related to the establishment and expansion of the system, in the 1970s a general consensus had been established about the need for a welfare state with practically no political opposition. Some changes were introduced to the system in the 1990s in response to a recession which affected the system’s generosity, such as re-introducing a waiting-day (which had been dropped in the 1980s) and lowering benefits. These changes were mainly budgetary decisions and not considered as the result of any specific debates on the design of the system (Johnson 2010). The sickness insurance administration was in 2000 (i.e., T1) organized through regional social insurance agencies with relatively high discretion among insurance officials in carrying out their work.

The second step is to outline the social interactions taking place between T2 and T3 which leads up to a reformed structure at T4 (significant changes are indicated in Figure 2). The cultural morphogenesis spawned several reforms which served to transform the sickness insurance system both in terms of regulations and in institutional structure. This structural morphogenesis was driven by political agents (the social democratic government 2002–2006 and the center-right government 2006–2010) and implemented by the SIA. The T1 of this process, around 2004, was a decentralized structure with relatively generous regulations, which in the following years (T2-T3) was transformed into a standardized and more restrictive system. Some of these changes were already underway since the cultural shift had led to stricter applications of the previous regulations, illustrated by a sharp decrease in sick leave numbers before the introduction of time limits (see Figure 2). This indicates that the cultural shift was effective in changing the attitudes and work procedures in the system even before the introduction of structural changes, and these changes mainly reinforced an already ongoing shift in how sick leave was managed by the system. Here, the legislative and institutional structure followed a changed normative structure based on new cultural values, as indicated by the arrows between the cultural and structural domains in Figure 1.

An essential part of the structural changes introduced was to centralize the regional insurance agencies into a national government agency, the SIA, established in 2005. One aim of the centralization was to combat regional variations through standardizing the management of sick leave and to foster a unified organizational culture across the country. This was a response to some of the critique put forward in the preceding years, where regional variations were used as an argument for establishing the over-utilization explanation. Along with the new organization, several measures were introduced to attain a more uniform process, such as introducing manuals and standard operating procedures detailing the expected time required for insurance officials to complete specific tasks, and management by performance targets. This went hand in hand with a more centralized and top-down management structure, increased specialization and less discretion for insurance officials in the management of sick leave cases (Melander 2013).

Other policy changes introduced in this period were lowered benefits, anti-fraud campaigns and inspectors, educational interventions in insurance medicine toward physicians, guidelines for recommended lengths of sick leave for specific diagnoses, and, after a shift in government, the introduction of time limits to sickness benefits. This latter change, introduced by a center-right government in 2008, was a radical reform. A “rehabilitation chain” was introduced where a person’s work ability was to be assessed in relation to the person’s job for the first 90 days, to any job the employer could offer for the following 90 days, and after 180 days of sick leave in relation to any job normally available on the labor market (regardless of whether such a job was available). After 365 days, sick leave days would end, and the person was to be transferred to unemployment insurance. This change led to a stronger focus on withdrawing benefits at the different time limits (Altermark 2020). Studies have also indicated that the reforms resulted in employers becoming more influential in determining whether people are able to return to work or not, since the option to wait out the rehabilitation chain brought them leverage in which workers they offer rehabilitative measures, favoring those who are younger and more well-educated (Seing 2014; Wåhlin et al. 2013).

The years following the centralization into a national authority was characterized by a new bureaucratic ethos, a strong focus on management, and a more distanced relationship to claimants to avoid overly generous attitudes; further, the employees generally expressed strong loyalty to the organization during these transitions (Melander 2013). This loyalty may however be related to a selection bias, since it has been noted that the turnover rates among the employees of the SIA increased – from 5% in 2005 to 15% in 2019 – with a decrease of mean number of years in the organization from 21 to less than 10 (Altermark 2020). This seems to denote a structural change also in the composition of the staff, where one potential cause of the increased turnover rates was dissatisfaction with the new culture. The standardization process created a more unified system and a stronger organizational identity which was in line with the new explanatory models of sick leave established in the preceding years.

In the third step, the resulting structure (T4) is described, which was in place by 2010. At this point, the structural shift was largely complete, with a reformed system and a new organization in place to enforce it. The evolved structure was still new, but the blueprint for the development in the following years (i.e., a new structural T1) had been drawn; what follows is a period of several incremental changes (Figure 2) which served to institutionalize the over-utilization explanation and the restrictive and individualized system design (Figure 3).

Cultural and structural morphostasis: institutionalizing suspicion

After 2010, social interactions and changes to the system strengthened the new cultural and structural position, i.e., the new T1. During the following T2-T3, interactions took place both to manage dissent following the changes, and to institutionalize the new structure.

Since the system was by now substantially reformed, people started expressing their discontent with the development. Studies of how the system was experienced by people on sick leave after the cultural and structural shifts indicate that the SIA efficiently implemented the new cultural model and that it, as a consequence, became more difficult and burdensome to argue for one’s sick leave case when facing an increasingly bureaucratized authority (Kaluza 2018). Another consequence was a sharp decrease in the public’s trust in the agency which led to an ambition to strengthen its credibility and reputation (Försäkringskassan 2015). A new GD was appointed in 2011 to implement measures to this end. One such measure was to introduce new managerial principles, such as lean production, and training insurance officials in motivational interviewing (MI). The ambition with these measures, introduced between 2012 and 2015, was to create more “customer-oriented” processes and improve the quality in meetings with claimants. This was complicated since such a change was not in line with the new cultural shift: the T1 from around 2010 and onwards with its performance measures had created an organizational culture which impeded the focus on quality in meetings (Ståhl and Andersson 2018) and the implementation of MI was largely a failure (Ståhl and Gustavsson 2018). During this period, however, public trust in the agency did increase somewhat, as did the generosity of assessments, indicated by an increase in sick leave rates (ISF 2018). This points to a balance act between generosity and trust, where the cultural and structural shifts have bred a more suspicious and less generous system which generates lower levels of trust among the citizens.

In 2014, the center-right government lost the election and was replaced by a minority government led by the Social Democratic and the Green Party. A regulatory change during this period was to drop the limit to sick leave days to prevent people with longer illnesses from losing their compensation. The overall ambition of the government at this time was however to keep sick leave rates on a low level. Based on an extensive government report on the social insurance system (Swedish Government 2015), the newly elected minister for social insurance declared a clear political goal: a maximum of 9.0 compensated days on sick leave per person and year (at the time, the rate was around 10 days). The recent trust campaign had increased the sick leave rates, which was not considered satisfactory and spurred further structural changes. The 9.0 target was introduced in the appropriation directions for the SIA in 2015, and a new GD for the agency was appointed to implement it. The internal changes within the agency during this period included reducing the number of meetings with claimants, strengthening the focus on medical assessments, keeping time limits, and strengthening the organization of insurance officials into teams.

During this period, the SIA undertook a strong cultural and structural conditioning of interactions within the system toward an increasingly strict organizational culture, reinforced by new organizational principles. The SIA focused on internal transparency through audits and performance targets while becoming more cut off from the outside world, primarily regarding personal interactions with claimants (Hollertz, Jacobsson, and Seing 2018). A key element in creating the new culture was through team organization which served as a vehicle to limit individual discretion among officials, and teams functioned as “moral corsets” by emphasizing specific values (Jacobsson and Hollertz 2021). The organizational structure and governance strategies conditioned the social interactions within the agency toward the political goals of lowering sick leave rates, and the social interactions served to reproduce and strengthen the cultural values around sick leave as an individual problem which should be met with restrictive access to compensation. This period was characterized by social interactions serving to reinforce the new cultural and structural T1, and the interactions were morphostatic in nature, i.e., aiming for cultural and structural reproduction.

The changes within the SIA were accompanied by arguments about legal security and legitimacy, and new procedures for work ability assessments facilitated officials’ questioning of medical certificates and withdrawals of benefits (Altermark 2020). One such procedure was to demand “objective findings” in medical certificates, even for diagnoses where such findings are difficult to obtain, such as mental disorders (a practice which the SIA was ruled not having legal grounds for in 2019). Another was to argue that people were able to work in jobs with little or no physical or mental demands, regardless of whether such jobs existed. This contributed to a spike in withdrawn benefits at the 180-day mark in the rehabilitation chain: between 2015 and 2020, the number of rejected claims increased by approximately 500% (Altermark 2020). Apart from lowering the sick leave rates, these changes again led to lower trust in the agency (ISF 2018).

The SIA’s approach to claimants was characterized by the culture of suspicion described above, which was translated into an organizational culture based on ideas of deservingness and a behavioral and moralistic attitude where claimants were seen as either trying to over-utilize or cheat the system, or as simply being unmotivated. The insurance officials were seen as guardians of the insurance system and as paternalistic interventionalists into peoples’ lives by reducing the financial incentives not to work (Altermark 2020; Börjesson 2018). The SIA developed an internal ideology based on a bureaucratic ethos which in combination with the government’s activation policy led to an increasingly restrictive system (Börjesson 2022). The SIA became a corporate agent of its own, acting in favor of the new cultural T1 rather than being aligned with the interests of the labor movement. It acted to introduce several organizational procedures with the intent to reinforce the current political ambition, going above what was mandated by the law (Altermark 2020; Börjesson 2018).

Using studies from various points in time, we can trace the development of insurance officials’ perspectives on their work. In the 1990s, the most common approach of case workers were focused on administration and not very demanding toward claimants (Edlund 2001). In a study with data from 2006, insurance officials’ perspectives were typologized into two types of public ethics: of care, or justice (Stensöta 2010), and officials developed stronger ethics of care with age and years in office. After 2010, it was concluded that officials who were happy with their work conditions were more oriented toward the organization’s goals, while those who were less content felt more restricted in terms of discretion (ISF 2013). The fostering of a strong and restrictive organizational culture hence seems to have made a controlling role more common, emphasizing a bureaucratic ethos of justice interpreted as strict but equal application of regulations. The strict insurance official was established as a norm with a moral obligation to restrict access to benefits (Jacobsson and Hollertz 2021).

The consequences of these institutional transformations and policy shifts for claimants have been dramatic, and often traumatic because of the stress related to claiming benefits (Altermark and Plesner 2022). Claimants have reported feeling mistreated and mistrusted by insurance officials through Kafkaesque procedures, resulting in negative health effects (Altermark 2020; Karlsson et al. 2022). Some of the claimants with denied benefits have responded through political action (Altermark and Plesner 2022), primarily through online forums and social media, suggesting the first attempts at forming a corporate agency among people previously excluded from political influence, i.e., unorganized primary agents (Archer 1995). New sickness insurance activist groups have formed coalitions with trade unions, who often represent similar views on the problems in the system and whose representatives have been vocal in the debate supporting the arguments of the activists.

The political influence of this activism has been limited. Some alleviations were made after 2010 which increased the system’s generosity slightly, but the changes have been incremental, and the basic structure with time limits and restrictive assessments has been retained. To reduce potential discontent among their constituents, the social democratic governments in office 2014–2022 adopted a rhetoric that did not match their political practice. While the government made a political point of improving the sickness insurance system, e.g., through dropping the end limit to benefits, the numerical target of 9.0 effectively strengthened the focus on lowering sick leave rates. While this was not reflected in harsher regulations, it certainly affected the government’s instructions to the SIA, indicating a “softer” governance strategy (Börjesson 2018).

In 2021 and 2022, after the SIA had received criticism both from protest movements and experts, the government issued alleviations to when and how work ability assessments were to be made, and the SIA was in 2022 mandated to specify the types of jobs that the claimant is believed to manage. It could be argued that these alleviations mainly served to legitimize the basic structure of the system and to pacify dissent following the strict implementation of the 2008 regulations. The political debate over the last years have largely been focused on other issues and political resistance to the design of the system is relatively uncommon.

The T4 at the end of the analysis is essentially built around the culture and structure established from 2010, where several social interactions have taken place to solidify the new system. The cultural and structural morphogenesis seems to have had consequences for the different agents’ agency (double morphogenesis), where those arguing in favor of the over-utilization explanation has had headwind over the last decades, resulting in stronger political impact. The formation of claimants into a new corporate agent has had some influence over policy, albeit small; the political mobilization has however changed the conflict lines in sickness insurance issues from being a struggle between the labor movement and employer organizations to a struggle between politicians and citizens. In the process, a triple morphogenesis has occurred where both insurance officials and claimants have seen changes to their social identities, based on their belonging to different corporate agents.

To summarize, most of the social interactions within the system after 2010 has served morphostatic ends, both regarding the cultural and the structural dimension. Most of the political decisions made regarding sickness insurance have been focused on either lowering or maintaining low sick leave rates. Changes in the SIA have been characterized both by revolutionary changes following GD appointments and the introduction of new regulations, and incremental changes which bit by bit aligned the organizational culture with political goals (Melander 2013). While political opposition exists, it is largely marginal, and its influence has been limited to minor changes to regulations.

Discussion

The analytical narrative outlined above will in this section be discussed in relation to political and organizational developments and contextualized to broader international shifts in welfare policies.

Political and organizational developments

As for political developments, institutions within well-established welfare systems are generally resistant to change, as are the broad principles of a country’s political culture. This path dependency creates increasing returns from staying on the path, and usually makes it difficult to introduce dramatic reforms once a system has stabilized (Pierson 2000). To change paths imply large investments; the opportunity costs of acting contrary to the cultural and structural conditioning will be higher the more established these structures are (Archer 1995). The cultural shift studied here had its pre-history in the material interests of different agents, and a policy window opened in the early 2000s which made it possible for a coalition of agents to push this window wide open. The influence of journalists and business lobbyists was substantial in facilitating this shift and made the attempt at reform worth the opportunity costs. This resulted in a substantial shift in how the parts of the cultural system are arranged and to which extent the different ideas are allowed to influence policy. The cultural shift had a strong impact on structural conditions (legislation, governance, institutional structures), which in turn influenced further actions to reinforce the new direction.

After the reforms to the sickness insurance system had been institutionalized, the Swedish system has entered a new path to which politicians now exhibit dependency. Even though there were strong critique against the introduction of the rehabilitation chain in 2008, the opposition to this legislation is at the time of writing strikingly weak. The opportunity costs of uprooting the reforms that took much political effort would require political parties to give up on policies in which they have invested a considerable amount of prestige. In addition, the parliamentary situation has become even less favorable for social policies since the emergence of the far-right Sweden Democrats, which through tapping into xenophobic attitudes have become established as one of the country’s largest political parties and is since 2022 a supporting party to the current right-wing minority government. The historical dominance of social democracy in Sweden is broken, and the Sweden Democrats have mainly supported right-wing economic and social policies.

As for the organizational dimension, the literature points to the SIA and its officials having developed into a new kind of corporate agent. Older research pointed out insurance officials as being primarily aligned with the labor movement (Lindqvist 1990) which later developed into a bureaucratized role (Edlund 2001; Melander 2013), and after the cultural and structural shift outlined here, into becoming controlling and suspicious guardians of the system (Altermark 2020; Jacobsson and Hollertz 2021). Studies point to a strong cultural and structural conditioning of the actions officials are allowed to take, with decreasing discretion among officials in their daily work (Jacobsson, Wallinder, and Seing 2020). The increased turnover rates indicate that the opportunity costs of acting contrary to the new organizational norms are high (Altermark 2020). Both the corporate agency and the identity of the SIA have developed through double and triple morphogenetic processes into something qualitatively different. The developing organizational culture of the SIA since its centralization into a government authority has hence been strongly influenced by the over-utilization discourse, and the result is a compliant staff where policies are implemented top-down and enforced through normative work between officials working in teams (Jacobsson and Hollertz 2021).

A broader shift in welfare state policies

The analytical narrative describes a shift driven by an emerging media discourse and a new public philosophy, where sick leave is predominantly seen as an individual problem best managed through a moral-paternalistic approach (Börjesson 2018). This public philosophy has been dominant regardless of the government in office since 2004, and therefore can be said to represent a broader normative shift in relation to the welfare state.

This shift is reminiscent of Wacquant’s description of how politicians gradually have crafted a neoliberal “centaur state”, being paternalistic and repressive toward the poor while being liberal and laissez-faire toward the well-off (Wacquant 2010). The behavioral and interventionistic attitude builds on an idea of individual responsibility and prioritizes duties over rights, sanction over support: the centaur state has developed from the “nanny” to the “daddy” state representing a “remasculinization” process (Wacquant 2010:201). The goal is to efficiently process people through the system to reduce the time and resources they spend. While rooted in right-wing politics, this idea has over time become common among centrist and progressive politicians and has had influence in Third Way-politics; it is hence partly designed, and partly an emergent property of how welfare states have come to develop. It can be recognized in how welfare systems have moved toward less generosity and larger demands for activity to be eligible for financial compensation (OECD 2003; Scruggs and Ramalho Tafoya 2022). Wacquant mentions Sweden as an exception to the rule which through commitment to social equality and security has demonstrated a “sturdy resistance” to neoliberalism (Wacquant 2010:209). As the analytical narrative details, this resistance has since then been eroded both through a gradual shift in public philosophies around welfare (Börjesson 2018) as well as through radical reforms to the sickness insurance system (Altermark 2020; Johnson 2010).

The development of the Swedish sickness insurance system is an example of the “workfare offensive” which alludes to a story about “the failings of the poor and the virtues of hard work; (…) it is a story which many want to hear” (Peck 2001:17). It implies a reformulation of the problem in order to present workfare as the solution, much as the shift that took place in the sick leave debate in Sweden in the early 2000s. Workfare represents a new political orthodoxy which is more than a simple critique of the efficiency of welfare institutions. Its proponents have been successful in disabling political opposition by portraying them as backwards or anti-work, illustrated in this case by social democrats who came to adopt and even promote the new over-utilization discourse (cf. Schmidt 2008). Through restrictive policies, workfare is focusing on deterring welfare claims rather than creating job opportunities, which can be recognized in the Swedish “rehabilitation chain” and its focus on withdrawing benefits at predefined timepoints, processing people toward work as quickly as possible. This focus is clearly illustrated by the repeated emphasis in government reports of how sickness insurance is supposed to be a transition insurance rather than offering long-term support (Swedish Government 2006, 2015).

Income inequality is related to welfare generosity; in states where inequalities are high, a plutocratic principle is at work which reduces benefit rates in welfare systems (Scruggs and Hayes 2017). Sweden has been a “frontrunner of the inegalitarian turn in Western Europe” (Therborn 2020:159), with increasing income inequalities alongside restrictions in welfare policies. Since the 1990s, Sweden has been governed by coalition governments led by either the Social Democratic Party or the Moderate Party, where austerity measures and strict financial policies have dominated, effectively limiting the possibilities for social reforms while simultaneously lowering taxes on wages and abolishing wealth and inheritance taxes. After the financial crash in the 1990s, policies shifted from social justice to sustainability under economic and demographic pressure. Further, Swedish businesses have been successfully lobbying for an individualist and neoliberal ideology, and the center-right governments of 2006–2014 implemented both tax reliefs and restricted access to sickness and unemployment insurance (Therborn 2018). This implies that the “cultural trope of individual responsibility” (Wacquant 2010:213), which according to Wacquant is a central ideational foundation of workfare systems, is prominent also within the Swedish system.

Conclusions

The development of the Swedish sickness insurance system in the 2000s reflects the demise of the social democratic welfare model. The analytical narrative presented here illustrates how this happened first through intense changes, and then through actions to stabilize a new system. The analysis offers a contribution by extending the timeline from previous research on the Swedish sickness system, showing that the development of the system since 2010 follows a prominent shift in both political culture and in the influence of different coalitions, and that more recent developments are rooted in a new path dependency based on substantive institutional reforms.

The theoretical contribution of this article lies in adopting analytical dualism to arrive at an analysis of how culture, structure and agency have interacted toward this shift. The analytic narrative offers a unified analysis of the development of the Swedish sickness insurance system and its shift toward neoliberal principles, which is firmly based in sociological theory. It adds a detailed temporalization of change and stability by identifying specific timepoints and phases where structural and cultural elaboration either occur, through morphogenic processes, or is stifled, through morphostatic processes. This approach makes it possible to identify phases where the change process was accelerated, and periods where new structures were institutionalized.

Another contribution of the article is presenting a detailed analysis of the Swedish case in an international context, by collating research in Swedish and relating it to the international trend of neoliberalization. As such, it becomes an illuminating example of this trend. From the analysis, we can conclude, borrowing Wacquant’s (2010) metaphor, that once Swedish policymakers had successfully bred a centaur state, the following decade was spent feeding this animal to make it stronger. The governance of the sickness insurance system was diligent in building a political and organizational culture, combined with an institutional structure to strengthen the new welfare logic. After feeding the centaur with organizational procedures and political goals, its hooves press with growing force on claimants and have placed many on the poverty line, while the life of the working population have been simultaneously eased through tax reliefs.

Acknowledgements

Thank you to Niklas Altermark who gave relevant and inspiring comments on a draft of the manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Christian Ståhl

Christian Ståhl is professor of sociology at Linköping University, Sweden. His research focuses on welfare policy and practice, particularly sickness insurance; work environment and health; the green transformation of working life and society.