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Country Portrait Finland - The Finnish Welfare State

03.06.2019    Susanne Jungerstam, Annika Wentjärvi

Content
  1. 1. Introduction
  2. 2. The Finnish Welfare Regime - the Social Democratic Model Revised
    1. 2.1 The Finnish Social Security System Today
  3. 3. The Culture of Social Services and the Development of a Social Support System
    1. 3.1 Social Security in a Historical Perspective
    2. 3.2 Family Policies and the Dual Breadwinner Model
    3. 3.3 Education and Equal Opportunities
  4. 4. Current Topics in Finnish Social Policy of Today
  5. Appendix: Statistical Data
  6. References
    1. Acts (Finnish Legislation, references in Swedish)
    2. Literature
  7. Authors

1. Introduction

In the literature of social policy, the Finnish welfare state is often considered belonging to the so-called Nordic model that includes welfare state regimes in Denmark, Finland, Iceland, Norway and Sweden. Most frequently, the Nordic model is also used equivalent to the so-called Social Democratic welfare state model, or the Scandinavian model, introduced by Esping-Andersen in 1990. This model, or cluster of welfare states, is understood to have come into being in the aftermath of labour market shifts, an expansion of social services and a shift towards gender equalisation in the Nordic countries that became visible most notably in the 70s and 80s. [1]

However, Finland is also a case to highlight if we were to criticise the Nordic welfare state as a collective concept for all Nordic countries. According to Kettunen (2001, 225), the collective understanding of a Scandinavian model in all Nordic countries is a concept of “reductionism in historical welfare state overviews”.

The main reasons for considering Finland a notable exception is the country’s late industrialisation (Finland remained predominantly rural until the late 60s, which is part responsible for the rather late development of a Finnish welfare state, and the fact that Social Democracy has been rather weak in Finland as compared to the other Nordic countries, and as compared to Sweden in particular. It may be argued that the great expansion of the welfare state in Finland occurred only during the 1970s and 80s, whereas Sweden, in particular, was a forerunner of the Scandinavian Model much earlier (Kettunen 2001, 225-226).

This being said, Finland today exhibits several such characteristics that are congruent with the general characteristics of the so-called Scandinavian – or Nordic – model. These are derived from characteristics related to the welfare states inputs, as summarised by Kautto et al. (1999, 13) in their large scope of social policy; emphasis on full employment, including tripartite negotiations within the employment sector; a high degree of universal entitlements to social benefits and services; and the high share of social expenditure of GNP and; high taxation in all Nordic countries.

Despite the similarities, it is argued that Finland and Denmark in recent decades have developed into more liberal and “continental” welfare states, whereas Sweden and Norway have been argued to represent the “traditional” Nordic welfare state model. In addition, there is some evidence of an overall shift among European welfare state regimes, in which the overall trend is that the Nordic countries, as well as other European social welfare state models, have developed more and more similar characteristics in recent decades. However, Nygård (2013, 168) describes a development that still in the 2000s clearly distinguishes the Nordic countries as a cluster of welfare states, with a comparatively high standard of living, a high degree of equality and comparatively high rates of social expenditure. Yet, Nygård, too, notes that the Nordic countries and other European countries are moving towards becoming more and more similar in profile.

Regardless of their differences, all Nordic countries are frequently ranked among the top ten nations of the world when focussing on wellbeing and/or happiness. [2] Therein, it is also clear that all Nordic countries perform rather well on characteristics used in the indexes used for comparisons related to both welfare and wellbeing, for instance: GNP per inhabitant; poverty; income distribution and transfers; social investment policies; investment in human resources and education; housing conditions; health indicators and access to health care. Therein, many indicators of social problems in contemporary societies are also used as indicators of the success and outcome of social policies. (Nygård 2013)

2. The Finnish Welfare Regime - the Social Democratic Model Revised

Characteristics of the Nordic welfare society are universal income guarantees and a broad and generous income safety net, including extensive income redistributions. In general terms, the Nordic welfare system applies to all citizens by law (Esping-Andersen 2002). The Finnish National Institute for Health and Welfare (THL) (2010) mentions the main features in the Finnish system, congruent with the Nordic welfare model:

  • the principle of universality, including the right to a basic level of social protection regardless of where a person lives in the country, his or her profession or economic position;
  • earnings-related benefits for employed persons;
  • a strong public sector;
  • a system based on tax funding and contributions; and
  • equal treatment.

Even though the Nordic model is often primarily related to a social welfare model including social services, the social welfare system in the Nordic countries also includes a common understanding of the health care sector being embedded in the welfare model (Lyttkens et al. 2016).

The purpose of social security in the Nordic welfare model is to ensure a minimum income and a reasonable level of consumption to all inhabitants, despite illness, unemployment, incapacity or old age, for instance. Therein, social security in the Nordic countries includes both social services and health care. Some of the social insurance benefits are based on work (such as the pension scheme), whereas others are primarily based on residence in Finland, thereby being included in the social security system. Examples of residence-based benefits are child support benefits and day care services (see chapter 3.2), but also a so-called guarantee pension if a person’s earnings-related pension is very low. [3]

The individual social security model in Finland rewards employment for all at the same time as the cultural expectation is that both women and men work. Hence, employment rates are quite high for both sexes, as can be noted in the statistical appendix of this article. Both men and women usually work fulltime, however women more frequently than men are employed within social services, care and education. (OSF 2016, 46). In 2018, 46% of the total population of Finland were employed, including almost an equal share of men and women. Though full-time employment is common among men as well as women, part-time employment is more widespread for older and for younger employees and for women. In 2018, 21% of female employees worked part-time, and 10% of male employees (OSF 2018). Hence, part of the economic success of Finland (and other Nordic countries) has been attributed to the goal of full participation in the labour market, at the same time as the high level of employment among women has been argued to enhance female emancipation (Nygård 2013, 172). [4]

However, one of the key differences between the Nordic countries as well as between the Nordic welfare state and other western welfare states, is how early child education and day care is organised. Both in order to facilitate full-time participation in the labour market, and to include all children in early childhood pedagogical activities, all municipals in Finland are obliged to arrange day care for children. Child care is also largely financed by public means, even in those cases where the municipality purchases children’s day care services from a private service provider (see below).

Feminist researchers, but also other researchers of social policy, have highlighted the importance of the shift from the so-called male breadwinner model to an individual model – or a so-called dual breadwinner model – for the development of the Nordic welfare regimes. Hence, the emphasis on full employment and gender-neutral equality has been followed by both individual social policies and individual taxation policies thus not being tied to a family unit, the latter which presupposes task differentiation and different roles for the sexes living together in a household. The dual bread-winner model presupposes that all adults in working age, who are not studying, retired, ill or temporarily on parental leave, participate in the work force. (Bergqvist 1999, 121-123) As a consequence of the focus on dual earners in a family, the outcome of the Nordic welfare model is thus also a more equal income distribution between partners of a household as compared to many other countries, and a rather widely developed gender equality.

2.1 The Finnish Social Security System Today

[5]

The Social Welfare Act (1301/2014) stipulates what services the municipalities must produce, at the same time as there is an extensive, additional legislation covering many of the services to be produced under the Social Welfare Act not accounted for here. The services included in the Social Welfare Act are: social work and social guidance; social rehabilitation; family work; home services; home care; informal care support; housing services; services provided in institutions (for example older adults’ residences); mobility services (transportation); mental health; substance abuse services; family counselling; and supervision of contacts between parents and children.

“Social spending mainly consists of expenditure on social welfare and health services, pensions, sickness, unemployment, and family and housing benefits / …/ Services are mainly funded by taxation. Client payments cover about 10 per cent of the costs of social and health services. Minimum benefits are mainly tax-financed while earnings-related benefits are financed by employer and employee contributions.” (THL 2010, 6)

Services included in the Social Welfare Act are free of charge, or eligible at a low cost, including public health care services or children’s day care.

In respect of current social services, Kananoja et al. (2016, 55) divides legislation into:

  1. general laws, including the Social Welfare Act (1301/2014)
  2. special legislation covering day care, child protection, disability, income security, family care, etc. and;
  3. additional legislation, legislation concerning the status and rights of social care clients, issues of data security etc. [6]

In addition to social work and social services, both early childhood education and health care services are most frequently considered part of the Finnish (and Nordic) welfare system(s). In Finland, social and health care policies are intimately intertwined, and during the last decade, there has been an intentional drive towards developing multiprofessional teams within public social service and health care. During the last election period (2015-2019), the aim of the government has been to reform social services and health care, as well as regional government, bringing the sphere of social services and health care even closer together. However, the reform was discontinued in March 2019, and it is now for the yet-to-be-appointed government to resolve how to proceed with the reform (more on this topic in chapter 4).

Today, health care services are available to all permanent residents at rather low costs and regardless of their financial situation. The idea of the universality of the welfare state, includes the principle of everybody being assured health for the future, and equal access to health care for all inhabitants (cf. Lyttkens 2016, 15). In the Health Care Act (1326/2010), health care services are defined as (1) health and welfare promotion, (2) primary health care and (3) specialised health care. Primary health care services are mainly provided by municipal health care centres, even though there are also private health care service providers. Specialised medical care is provided by district hospitals, though in respect of specialised health care, some services may be offered by private service providers as well.

The Health Care Act requires each municipality to have a health centre, or to uphold a joint service centre with other municipalities. In brief, primary health care includes the following services: consultations; health counselling, including health education, contraception advice, maternity and child welfare and medical examinations; screening and vaccinations; dental health service; school and student health care; mental health services; emergency treatment; and home care services. Secondary health care, on the other hand, includes specialised medical care defined as specialised medical and dental health. [7]

Specialised medical care is primarily provided by hospital districts; however, the provision of some demanding medical operations is centralised to five university hospitals in different parts of the country (in Helsinki, Turku, Tampere, Kuopio and Oulu). Generally speaking, prehospital care and emergency care are provided for everyone in need, whereas non-emergency specialised medical care requires a referral issued by a medical professional or an occupational health physician. (Ministry of Social Affairs and Health, n.d.)

As a basic principle, both social services and health care are regulated by law, and municipalities have the responsibility to arrange an extensive set of services for their inhabitants. Nygård (2013, 38-41) differentiates between four main actors providing services within the realm of social policy in Finland:

  1. The public sector, including both state and municipal actors. The services produced by the public sector are based on legislation and upheld as non-profit service providing organisations.
  2. The private sector, where the activities may be profit based. Many organisations offering social services are nevertheless primarily financed by public means, including private day care facilities and family work units.
  3. Family and close relatives who, similar to practices in other countries, take care of their loved ones. Here, both financial and practical support systems are eligible to care takers at home.
  4. Civil society, for example NGOs and churches conducting non-profit voluntary activities. As compared to many other countries, the role of NGOs is less central in Finland having an extensive public sector fulfilling the need for services, however the role of the church as a welfare actor, together with (other) NGOs, has increased in recent decades.

The lion’s share of the services included in the Finnish welfare model are thus produced by the municipalities (public sector), either as a service provided by the municipality itself; as a cooperation of municipalities, including two or several municipalities or; as a purchased service from another municipality. Due to the large public sector, personnel shares accounted for by public and private providers in 2014 also shows that only 28% of the health care and social welfare personnel work in the private sector in Finland (THL 2009, 160-161).

In respect of the financing of health care, Finland has a mixed system in which health care is both tax-based and state insurance based. [8] The financing of the social protection expenditures in Finland was a shared responsibility; in 2016 the state accounted for 26.2%, municipalities for 21.8%, employers for 33.7%, insured for 13.3% and other for 5% of the financing (THL 2019, 179). Social protection expenditure as share of GDP was 32.0 % in Finland; only France and Denmark had higher shares in 2016 (THL 175, 183; Eurostat 2019).

3. The Culture of Social Services and the Development of a Social Support System

As noted above, the Finnish welfare system is founded on a principle of universal rights based on citizenship and a gender-neutral normalcy of wage-work for all (Kettunen 2001, 239). While the former is dependent on an extensive public sector and transfers of economic resources, the latter is also dependent on preconditions created and upheld by the welfare state, for instance including a subjective right to child care. Therein, the Finnish welfare state includes a wide-ranging set of services related to social work, health care, early childhood education and day care – but also for free educational services including education from elementary school to higher education for all of its permanently residing inhabitants.

Next to the rather extensive social services and health care policies, family policies are considered an important part of the Nordic welfare states, therein being characterised by a strong public sector and social services that are aimed at enabling full employment for all and compensation for any loss of income during limited periods of time, including the period when a parent takes care of the family’s youngest ones. Even though other welfare models also have different arrangements for parental leave and income compensation, the Nordic countries are distinctive in their scope of policies and public commitment to developing the policies, as well as in respect of the extensiveness of financial support and publicly financed services offered for families (Bergqvist 1999, 121).

In this chapter, we focus on three main themes of the development of the Finnish welfare state: first, the development of social and health insurance system, including the development of the Finnish retirement scheme(s); second, the dual bread-winner model, family policies and day-care services; and, third, educational arrangements and support of educational equity.

3.1 Social Security in a Historical Perspective

In a historical perspective, the social security system of the Finnish welfare regime developed rather late, as compared to other Nordic countries (see above). The first regulations regarding sickness was passed already in 1897, i.e. the Act on Voluntary Sickness Funds. Yet, it was to last until 1963 before the Sickness Insurance Act was passed, at that time in part as a consequence of the signing of the Nordic convention of social security in 1956, regulating the common Nordic labour market. (Kettunen 2001, 237)

Today, the legislation regulating social work is primarily based on legislation prepared in the 70s and passed in the 80s, however with some later amendments. Only a few laws have been passed introducing genuinely new aspects of social services, or radically different amendments replacing older regulations. Also, regulations concerning unemployment were first legislated in 1917, however employment funds had insufficient funds to pay maximum benefits to their members. Not all unions found it even necessary to establish funds – and according to literature, unemployment funds could hardly be considered part of an official social security until the 50s. (Bergholm 2009, 36) In 1960, new legislation concerning unemployment support was passed. Thereby, “[t]he decentralized, weak and nearly irrelevant unemployment benefit funds connected to the trade unions got a new lease of life when this new legislation obliged employers to finance these funds.” (Bergholm 2009, 38)

The old-age and disability insurance scheme was introduced in the 1930s, but in practice, the first old-age benefits were paid as late as 1949. In 1956, the National Pension Act instituted flat-rate benefits combined with an income-tested assistance share. In 1961 the Private Sector Supplementary Act was introduced, mainly as a result of both blue- and white-collar trade unions and market-organisations being dissatisfied the Act of 1956 that was considered to favour agrarian people. (Kettunen 2001, 236) In effect, the Finnish pension system then came to be formed by two different schemes, one based on pension benefits earned within public service, and one based on earnings within private organisations.

Regardless of the fact that Finland was regarded having caught up with the development of the Nordic welfare state in the 70s, retirement benefits and benefits associated with an opportunity to early retirement was not quite as far developed in Finland in the late 80s as in the other Nordic countries. Only at that time, regulations were enforced to enable more flexible retirement schemes, even though realities of decades ahead were already anticipated, including a diminishing population in working age and an aging population with an increased length of life expectancy. Yet, in part as a consequence of the deep recession that followed the collapse of the Soviet economy in the early 90s, unemployment rates in Finland rose to 17% and the trend of increased rates of early retirement was difficult to turn; many older adults felt morally obliged to leave early in order to offer younger employees a job instead of long-term unemployment. (Gould and Saurama 2004, 74-75) Therefore, it would last until 2005 before the retirement system were thoroughly revised again, at that time introducing regulations that were aimed at encouraging an extended working life until 67 years of age. [9]

In 2017, Finland had yet another extensive earnings-related pension reform concerning the retirement age, among other things, due to higher life expectancy and demographic changes. New is that each age group has its own retirement age. A person born in 1960 today has a retirement age at 64,6 years of age, whereas persons born in 1970 reach their retirement age at 65,8. Every employee will earn his or her pension at the same rate and each year the pension growth rate is 1,5% of the person’s annual gross wages. The average gross pension is 1680€/month in 2018, a bit higher for men (1898€) than for women (1499€). In 2018, the expected retirement age in Finland was 61,3 years (ETK 2019).

A recent development in respect of social security in Finland is also the much-debated basic income experiment that was tested in Finland during 2017 and 2018. Initial evaluations indicate that persons participating in the experiment did not increase employment levels in a short-term follow-up; however, many participants perceived their wellbeing better than the participants of the control group (Kela, 2018). [10]

3.2 Family Policies and the Dual Breadwinner Model

Not even before the Second World War did Finland quite meet the “traditional” family ideals of female engagement in tasks related to the private sphere and men in the public sphere that was characteristic of most western European countries at the time. This was due to the fact that Finland long had been dominated by an agrarian economy and rural households, in combination with many working age men being absent, first, during the civil war in the early days of Finnish sovereignty [11], and two decades later during WWII. In addition, the number of women (both married and unmarried) engaged in wage-work was comparatively high also before WWII (Kettunen 2001, 239-240).

Different forms of family policies existed well before the period of development of the Finnish welfare state, or even before the establishment of a so-called Nordic model. For instance, the first day care centre for children was established already in 1890 in Helsinki. In line with the idea of equal access to wage-work, married women were allowed to participate in wage-work without the permission of their husbands from 1919 onwards, and in 1938, the maternity grant was first introduced in Finland. Initially, the maternity grant was intended to serve low income mothers only. It was available both as a money grant and as a so-called benefit-in-kind grant, or as a combination of the two. In 1949, the maternity grant was introduced as a benefit to all mothers and today, still, expecting mothers can choose between a sum of money and a so-called maternity package, the latter containing about sixty products, including baby clothes and baby care products. [12]

It took until the 70s and 80s before parental leaves enabled fathers to participate in child care at home. Sweden introduced a parental leave reform in 1974, including fathers, aiming at promoting the idea of a dual breadwinner family. This was followed only in 1978 by Norway and in 1980 by Finland. (Bergqvist 1999, 126). Since then, several reforms have been introduced in the Nordic countries, concerning both the length of parental leave and entitlement to paternity leave, and quotas differentiating the length of leave that fathers and mothers are entitled to, respectively.

Today, maternity leave, beginning prior to the birth of a child, lasts for 105 working days. Only this period is exclusively intended for the mother, however the father can take a maximum of 18 working days of paternity leave simultaneously with the mother’s maternity leave after the child is born. Parental leave, beginning immediately after maternity leave, is eligible for either parent and lasts 158 working days. (Ministry of Social Affairs 2013, 16) In brief, Kela’s benefits to families with children today include: maternity grant; maternity, special maternity, paternity and parental allowance; a child benefit; child care allowances; assistance for ill and disabled children; and child maintenance allowance (Kela 2015b).

List 1: Introduction years of families’ welfare policies in Finland

1890 – The first Kindergarten in Finland is established in Helsinki

1919 – Married women are entitled to wage-work without permission of their spouses

1937 – The Maternity Grants Act was accepted

1948 – Child allowances are introduced. Finland also becomes the first country in the world to introduce free school meals

1973 – Local authorities are given a statutory obligation to provide day care for children under school age

1978 – Sharing parental leave becomes possible; fathers are given the right to take paternity leave (however subject to the mother’s approval)

1985 – Maternity allowance is renamed maternity, paternity and parental allowance

1989 – Child care leave is introduced for parents of children under the age of 3

1990 – All children from 3-7 years of age have a subjective right to municipal day care

1996 – All children under school age (7) have the right to day-care

2001 – Local authorities are given a statutory obligation to provide free (voluntary) pre-school education for children at the age of 6

2004 – Provisions on before-school and after-school activities for first-year and second-year pupils are added to the Basic Education Act (628/1998)

2013 – The number of days of leave reserved exclusively for the father is raised to 54 working days

2015 – The subjective right to day care is limited to 20 hours/week if either a is at home due to unemployment, maternity or paternity leave for younger children, for instance.

Sources: Based on Tilastokeskus 2016; Kela 2015b; Ministry of Social Affairs and Health 2013; Kettunen 2001; Bergqvist 1999 and updated legislation

Even though day care for children was widely developed in the 70s and 80s, it was to last until 1990 before the universal right to child care and early childhood education was introduced in Finnish legislation. Today, all municipalities are obliged to arrange day care for children, whereby parents often can choose between three different forms of government-assisted forms of child care after the parental leave period, lasting until the child attends pre-school or school. In addition, during preschool and the first two years of basic education, local governments most commonly arrange before-school and after-school activities, either independently or together with other service providers, in order to supply a safe environment for young children whose parents are still at work. (Ministry of Social Affairs 2013)

Day care is partially financed by fees depending on a family’s total income and family size, and on how many hours a week a child is attending early childhood education. Therein, families with a low income pay a very low fee, whereas families with a high income pay the maximum fee. Yet, fees paid by families are still way below the real cost of children’s day care, which is largely financed by taxes.

3.3 Education and Equal Opportunities

In the Nordic welfare states, education has long been seen as an important, universal right and a guarantee for progress, equity and affluence, therein being part of the welfare system. The aim for general welfare policies and the so-called Nordic welfare model has also long included the element of equal educational opportunities as a tool for eliminating inequality between inhabitants of socio-economic variance, gender, language etc. (Rinne 2000, 134-135)

The Finnish education system has developed a uniform system, which is principally monopolised by the government. The Finnish National Agency for Education introduces educational policies in Finland by the following:

“Providing equal opportunities for all citizens to high-quality education and training is a long-term objective of the Finnish education policy. The key words in Finnish education policy are quality, efficiency, equity and internationalisation. The basic right to education and culture is recorded in the Constitution. The policy is built on the principles of lifelong learning and free education. Education is seen as a key to competitiveness and wellbeing of the society.” (National Agency for Education 2019)

The Finnish education system includes free education from 6 years of age for all Finnish inhabitants, the first year as pre-school education. In the year a child turns 7 years of age he or she will be appointed to a basic school by the municipality. According to law, Finnish municipalities are obliged to arrange basic education for all children aged 6-16 separately for both Finnish and Swedish speaking children if there are children registered with either Swedish or Finnish as their mother tongue residing in the municipality. (Basic Education Act 628/1998) Regardless, both Finnish speaking and Swedish speaking schools follow the same national core curriculum for basic education, which is determined by the Finnish National Agency for Education and renewed approximately every ten years (Ministry of Education and Culture and The Finnish National Agency for Education, 2017). Within the realm of basic education, local authorities are obliged to arrange transportation to and from the school, as well as one warm meal for all children (Basic Education Act 628/1998)

Since the 90s, there has been a shift in the Finnish school system, especially at the secondary level, from a general and uniform comprehensive school to a more differentiated one (Rinne 2000, 136-137). Despite the fact that Finnish pupils still perform rather well in the international PISA comparisons, for instance, it has been argued that the declining performance of Finnish 15-year olds from 2006 to 2015 (see OECD 2016, 91), is the result of a more and more dispersed school system undermining equal opportunities for all.

After compulsory education students apply for either general or vocational upper secondary education or training. Until now, Finland has had a comparatively good record of adolescents and young adults completing their ongoing education at all levels. During 2016-17 an average of 5,1% of interrupted their studies without entering another study, the highest share being 7,4 percent among students attending vocational training and 7,3 percent among students attending higher education (university of university of applied sciences). (OSF 2017)

Both a secondary upper level school matriculation examination and post-secondary level vocational training provides general eligibility for university education. Once admitted, higher education is free of charge for all EU member state citizens, including free access to libraries etc. that frequently make all literature needed available. (Ministry of Education and Culture and the Finnish National Agency for Education, 2017)

In part as a means to ensure educational opportunities for all, the Finnish social insurance system includes extensive benefits for students, including study grants to be applied from Kela, along with state guaranteed study loans, general housing allowances etc. [13]. All students are also offered state subsidised meals at vocational and higher education institutions, whereas meals at basic schools are provided for free. [14]

4. Current Topics in Finnish Social Policy of Today

According to literature, the Nordic countries have been seen to exemplify a socio-economic success story, in general, despite the recessions in the 70s and in 90s, and the banking crises that stroke particularly the Icelandic economy in 2008. The economic success of the Nordic countries has mainly been attributed to explanatory factors found in three areas:

  1. the countries’ history, geographical location, natural resources, population and religion;
  2. the political culture(s) and societal institutions, including a high degree of trust in institutions and a high educational level, among others; and
  3. the economic policies characterised by openness and flexibility and a well-functioning infrastructure for economic production. (Nygård 2013, 177)

Therein, the Nordic welfare model is based on the citizens' shared responsibility. The Finnish social security system is successful in terms of equalising income differences. The Gini-coefficient for Finland has a value of 27,7 in year 2017 (disposable income) as compared to the EU as a total in 2017 which was 30,7. The coefficient is a measure on distribution of welfare, where a lower coefficient indicates a more equal, and a high value a more unequal income relation (THL 2019a, 217).

In spite of the positive elements of the Nordic welfare regime and socio-economic policies, there are significant national and global changes that have an impact on the social security system and its future in Finland, like in most western countries today. The most notable changes are to be found in the changes of the age structure of the population and the ongoing globalisation, but also in respect of the working of the welfare state itself (Nygård 2013, 178). Therein, Finland faces a tremendous challenge in securing continued financing of those welfare services that are available today, including all of its components, such as children’s day care, education services and dwellings for the aging population and advanced secondary health care services.

Hence, the health care systems of all Nordic countries have been described to shown remarkable resilience (Lyttkens et al. 2016, 24). Though there have been vast reforms in the health care systems in the Nordic countries, a future challenge will yet be to adjust the model to meet the new circumstances.

One of the main measures taken in Finland to meet the challenges of sustaining welfare services in the future, was the planning of a most exhaustive reform of the social and health system during last governmental period 2015-2019, together with a reform of the country’s regional government. Therein, the government consisted of the Centre Party, the National Coalition Party and the Finns Party, the latter which split into two parties during the governmental period and was followed in government by the Sininen Tulevaisuus party. Together the governmental parties prepared a reform establishing new counties together with new structures for services and funding of health and social services, along with a reform of the freedom of choice for all inhabitants. The reform was planned to be implemented in January 2021. Yet, in March 2019 the reform was discontinued only one month before the parliamentary elections, in part as a result of heavy criticism of the reform both by opposition parties and individual members of parliament of governmental parties. It was also unclear whether the reform would pass the constitutional requirements in the short period before the elections. [15]

Regardless of the discontinuation of the reform, the next government will face the challenge of proposing a new or a revised reform answering to the challenges of a welfare service reform in Finland, together with a need for developing new strategies to slow the trend of depopulation of rural areas, a decreasing number of inhabitants participating in the labour market and an aging population in need for health care and social services. In addition, the new government will face issues within the realm of social welfare related to immigration, unemployment and basic income, pension schemes and a possible reform of the higher education system, among others.

Appendix: Statistical Data

Table 1: Basic data on the total population
FinlandYearNumber% of total populationProjection year 2040 (%, N)
Population, Age 2017 5 513 130 100 % 5 601 713
65+ 2017 1 179 318 21,4 % 27,2 % (1 524 552)
15-64 2017 3thi&nsp;443 388 62,5 % 59,7% (3 342 578)
0-14 2017 890 424 16,2 % 13,2% (734 583)

Source: THL (National Institute for Health and Welfare). 2019. Statistical yearbook on social welfare and health care 2018, (p. 23-24). Available: http://www.julkari.fi/bitstream/handle/10024/137595/Sosiaali-%20ja%20terveysalan%20tilastollinen%20vuosikirja_2018_verkkoon.pdf?sequence=1&isAllowed=y (18.4.2019)

Table 2: Social Welfare Expenditure in Finland
FinlandYear%
Social protection expenditure (share of GDP) 2016 30,9 % of GDP
Health expenditure (share of GDP) 2016 9,5 % of GDP
Social protection expenditure by function, 5 highest (excluding children’s day care and education):2017% of total expenditure
Old age   41,7 %
Sickness and health   22,1 %
Family and children   9,6 %
Disability   9,4 %
Unemployment   7,1 %
Health expenditure2016Million €
Primary care   2 785
Specialised health care   7 248

Source: THL (National Institute for Health and Welfare). 2019. Statistical yearbook on social welfare and health care 2018. Available: http://www.julkari.fi/bitstream/handle/10024/137595/Sosiaali-%20ja%20terveysalan%20tilastollinen%20vuosikirja_2018_verkkoon.pdf?sequence=1&isAllowed=y (10.4.2019)

Table 3: Employment
FinlandYear% of workforceMenWomen
Employment rate (15-64 y) 2018 71,7 % 72,7% 70,6%
Unemployment rate (15-74 y) 2018 7,4 % 7,4% 7,3%
FinlandYear% of all employedMenWomen
Full-time payed work (15-74) 2018 73,2% 74,8% 71,6%

Source: OSF (Official Statistics of Finland). 2019. Labour force survey [e-publication].
ISSN=1798-7857. Time Series Data 2009-2018 2018, 2 Employment and unemployment in 2018. Helsinki: Statistics Finland. Available: 18.4.2019.

Table 4: Education
FinlandYearTotal in numbers% of population
Population with educational qualification, total (15+ years of age) 2017 3 334 648 72,1 %
   % of 1-6 years old
Early childhood education and care (1-6 y) 2017 247 968 71%

Source: OSF (Official Statistics of Finland). 2019. Educational structure of population [e-publication].ISSN=2242-2919. Helsinki: Statistics Finland. Available: http://www.stat.fi/til/vkour/index_en.html. 23.4.2019.

THL (National Institute for Health and Welfare). 2019. Statistical yearbook on social welfare and health care 2018, (p. 46). Available: http://www.julkari.fi/bitstream/handle/10024/137595/Sosiaali-%20ja%20terveysalan%20tilastollinen%20vuosikirja_2018_verkkoon.pdf?sequence=1&isAllowed=y (18.4.2019)

Table 5: Pensions 2018
FinlandAllMenWomen
Number of pension recipients 1 485 000 672 000 812 000
Average total pension €/month 1 680 € 1 898 € 1 499 €

Source: Finnish Centre for Pensions. 2019. Earnings related pension system in graphs and figures. Available: https://www.etk.fi/en/about-us/images/earnings-related-pension-system-in-graphs-and-figures/ (18.4.2019).

References

Acts (Finnish Legislation, references in Swedish)

Act on Early Childhood Education. Lag om småbarnspedagogik (540/2018). Available: http://finlex.fi/sv/laki/ajantasa/2018/20180540 (29.4.2019)

Basic Education Act. Lag om grundläggande utbildning (628/1998). Available: https://www.finlex.fi/sv/laki/ajantasa/1998/19980628 (12.4.2019)

Health Care Act. Hälso- och sjukvårdslag (1326/2010). Available: http://finlex.fi/sv/laki/ajantasa/2010/20101326 (29.4.2019)

Social Welfare Act. Socialvårdslag (1301/2014). Available: http://finlex.fi/sv/laki/ajantasa/2014/20141301 (29.4.2019)

Literature

Baggott 2008, pp. 318, 321. In Alcock, P., May, M. and Rowlingson, K. 2008. The Student’s Companion to Social Policy. Maldefindn, Oxford, Victoria: Blackwell Publishing.

Bergholm, T. 2009. The Making of the Finnish Model. In Scandinavian Journal of History, 34(1), 29-48.

Bergqvist, C. 1999. Childcare and Parental Leave Models. In Bergqvist, C., Borchorst, A., Christensen, A-D., Ramstedt-Silén, V., Raaum, N. Styrkarsdottir, A. (eds) 1999. Equal Democracies. Gender and Politics in the Nordic Countries. Oslo: Scandinavian University Press.

Esping-Andersen, G. 2002. Why We Need a New Welfare State. Oxford University Press.

Esping-Andersen, G. (ed.) 1999. Welfare States in Transition. Adaptions in Global Economies. London, Thousand Oaks, New Delhi: SAGE Publications.

ETK (Eläketurvakeskus) 2019. Eläkejärjestelmä muutoksessa. Available: https://www.etk.fi/elakejarjestelmat/elakejarjestelma-muutoksessa/muutokset-vuosi-vuodelta/ (24.4.2019).

EURYDICE (n.d.): Finland Overview. Available: https://eacea.ec.europa.eu/national-policies/eurydice/content/finland_en (29.4.2019)

Eurostat 2019. Eurostat data base ESSPROS. Available: https://ec.europa.eu/eurostat/statistics-explained/index.php/Social_protection_statistics (10.4.2019).

Helliwell, J., Layard, R.and Sachs, J. 2019. World Happiness Report 2019. Available: https://s3.amazonaws.com/happiness-report/2019/WHR19.pdf (25.3.2019)

Gould, R. and Saurama, L. 2004. From Early Exit Culture to the Policy of Active Ageing: The Case of Finland. In Maltby, T., Vroom, B. de, Mirabile, M.L. and Øverbye, E. (eds): Ageing and Transition to Retirement. A Comparative Analysis of European Welfare States. Aldershot: Ashgate Publishing Ltd.

Kananoja, A., Lähteinen, M. and Marjamäki, P. 2016. Sosiaalityön käsikirja. Helsinki: Tietosanoma.

Kautto, M., Heikkilä, M., Hvinden, B., Marklund, S. And Ploug, N. (eds) 1999. Nordic Social Policy. Changing Welfare States. London and New York: Routledge.

Kela (Kansaneläkelaitos). 2018. The Finnish Basic Income Experiment. Available: https://www.kela.fi/web/en/basic-income-experiment (9.5.2019)

Kela (Kansaneläkelaitos). 2015a. Pensions and retirement. Pension security, housing allowance and care allowance. Available: https://www.kela.fi/documents/10180/1978560/Pensions_Kela.pdf (29.4.2019)

Kela (Kansaneläkelaitos) 2015b. Home and family. Benefits for families with children and housing benefits. Available: https://www.kela.fi/documents/10180/1978560/2015_Home_family.pdf (24.4.2019)

Kela (Kansaneläkelaitos). 2015c. Studying. Financial support for students and military conscripts. Online: https://www.kela.fi/documents/10180/578772/Esite_STUDYING_Kela.pdf/583949f8-f126-4820-8e82-e98eb8a8fd7d (12.4.2019)

Kettunen, P. 2001. The Nordic Welfare State in Finland. In Scandinavian Journal of History, 26(3), 225-247.

Lyttkens, C. H., Christiansen T., Häkkinen, U., Kaarboe, O., Sutton, M., Welander A. 2016. The core of the Nordic health care system is not empty. In Nordic Journal of Health Economics, 4(1), pp. 7-27.

Ministry of Education and Culture and the Finnish National Agency for Education. 2017. Finnish Education in a Nutshell. Available: https://www.oph.fi/download/146428_Finnish_Education_in_a_Nutshell.pdf (11.4.2019)

Ministry of Social Affairs and Health, n.d. Social and health services. Available: https://stm.fi/en/social-and-health-services (18.4.2019)

Ministry of Social Affairs and Health. 2013. Child and Family Policy in Finland. Available: http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/69916/URN_ISBN_978-952-00-3378-1.pdf (11.4.2019)

The National Agency for Education 2019. Education Policy. Available: https://www.oph.fi/english/education_system_education_policy (11.4.2019)

Nygård, M. 2013. Socialpolitik i Norden. Lund: Studentlitteratur.

OECD 2016. PISA 2015 Results (Volume I). Excellence and Equity in Education. DOI: https://dx.doi.org/10.1787/9789264266490-en. Available: https://read.oecd-ilibrary.org/education/pisa-2015-results-volume-i_9789264266490-en (20.3.2019)

OSF (Official Statistics of Finland). 2018. Labour force survey [e-publication]. ISSN=1798-7857. Time Series Data 2009-2018 2018. Helsinki: Statistics Finland. Available: http://www.stat.fi/til/tyti/2018/13/tyti_2018_13_2019-04-11_tie_001_en.html (18.4.2019)

OSF (Official Statistics of Finland). 2017. Discontinuation of education [e-publication]. Helsinki: Statistics Finland. Available: http://www.stat.fi/til/kkesk/2017/kkesk_2017_2019-03-14_tie_001_sv.html (12.4.2019)

OSF (Official Statistics of Finland). 2016. Naiset ja miehet Suomessa. Helsinki: Edita Publishing Oy. Available: http://www.stat.fi/tup/julkaisut/tiedostot/julkaisuluettelo/yyti_namisu_201600_2016_16132_net.pdf (30.1.2017)

Rinne, R. 2000. The Globalisation of Education: Finnish Education on the Doorstep of the New EU Millenium. In Educational Review, 52(2), pp. 131-142

THL (National Institute for Health and Welfare). 2019. Statistical yearbook on social welfare and health care 2018. Available: http://www.julkari.fi/bitstream/handle/10024/137595/Sosiaali-%20ja%20terveysalan%20tilastollinen%20vuosikirja_2018_verkkoon.pdf?sequence=1&isAllowed=y

THL (National Institute for Health and Welfare). 2010. Facts about social welfare and health care in Finland 2010. Available: http://www.julkari.fi/bitstream/handle/10024/79913/facts2010.pdf?sequence (18.4.2019)

Authors

Susanne JungerstamSusanne Jungerstam
PhD, Principal Lecturer of social sciences at Novia University of Applied Sciences, Vaasa (Finland).
Current research interests focus on themes related to welfare, political participation, empowerment, sense of influence and living conditions of an ageing population.
E-mail: Susanne.jungerstam@novia.fi

Annika WentjärviAnnika Wentjärvi
MA, Research Manager/Health and welfare, Novia University of Applied Sciences, Vaasa (Finland).
Main research interests focus on social policy, income distribution, pension systems and living conditions of an ageing population.
E-mail: Annika.Wentjarvi@novia.fi


Footnotes

[1] For a more detailed description of the Scandinavian welfare states, see Esping-Andersen (1999).

[2] For instance, see Nygård 2013, chapter 8. In respect of later rankings of happiness, for instance, see Helliwell, Layard & Sachs 2019.

[3] In respect of a full description in English of pensions eligible to persons residing in Finland today, including pensions earned in Finland, see also KELA 2015a.

[4] Nygård (2013, 172) also refers to the distinction made by feminist authors between “women friendly societies” in terms of employment opportunities of women and the actual women-friendliness of society in terms of equal opportunities. Also see Bergqvist (1999).

[5] See for instance the Ministry of Social Affairs and Health (n.d.) on https://stm.fi/en/social-and-health-services or https://www.expat-finland.com/living_in_finland/social_security.html and https://www.kela.fi/web/en and https://www.infofinland.fi/en/living-in-finland for a more detailed description of current social security and health care services in Finland. For more information and detailed statistical data on social welfare and health care in Finland, also see Statistical Yearbook on Social Welfare and Health Care 2018. Available online: http://www.julkari.fi/bitstream/handle/10024/137595/Sosiaali-%20ja%20terveysalan%20tilastollinen%20vuosikirja_2018_verkkoon.pdf?sequence=1&isAllowed=y

[6] For an extensive introduction into social services in Finland (in Finnish), as well as into its methods, personnel, research and development, see Kananoja et al. 2016.

[7] For a more detailed description of health care services in English, within the Finnish contexts of primary and secondary care, see Ministry of Social Affairs and health (n.d.): https://stm.fi/en/social-and-health-services; https://www.expat-finland.com/living_in_finland/public_healthcare.html and https://www.expat-finland.com/living_in_finland/private_healthcare.html

[8] A common categorisation of health care funding is: tax-based; state insurance based and; private insurance based (Baggott 2008, pp. 318, 321).

[9] Also see ETK (Eläketurvakeskus) 2019 in respect of changes adopted in the Finnish retirement legislation 2005-2017.

[10] See Kela (2018) in respect of additional information on research, evaluations and future perspectives. A follow-up is planned in 2020. Also, see video on the rationale of the basic income experiment on https://www.kela.fi/web/en/basic-income-experiment (2:21) and a slideshow on the history of the basic income experiment https://www.slideshare.net/kelantutkimus/general-information-the-finnish-basic-income-experiment (Kela, 2018).

[11] Finland was an autonomous Grand Dutchy of Russia 1809-1917, after which Finland declared independence in 1917. Prior to 1809 Finland was part of the Swedish Kingdom.

[12] For more information on the maternity package, see Kela [the social insurance institution of Finland], n.d., including short film (4:07) on maternity package contents. Online: https://www.kela.fi/web/en/maternitypackage (10.4.2019)

[13] For more information on available student’s benefits, see Kela (2015b).

[14] For a more extensive comparative description of the Finnish educational system today, see for instance EURYDICE (n.d.) on https://eacea.ec.europa.eu/national-policies/eurydice/content/finland_en.

[15] For more information about the reform that was planned and now has been discontinued, see Valtioneuvosto (n.d.). General description of the reform package, including video on the reform (2:12 min). Available: https://alueuudistus.fi/en/general-information-reform. NB! the information and video only highlights the perceived opportunities and positive effects of the reform, whereas opposition parties, and eventually also some members of governmental parties, found the negative effects of the planned reform to carry more weight than the possible opportunities, resulting in government failure and discontinuation of the reform in March 2019.


Cite this publication
Jungerstam, Susanne and Annika Wentjärvi, 2019. Country Portrait Finland - The Finnish Welfare State. In: socialnet International [online]. 03.06.2019 [Date of citation: 20.09.2019]. ISSN 2627-6348. Available from Internet: https://www.socialnet.de/international/en/finland.html

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