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The Finnish Welfare State in the 1990s

Finland has an advanced welfare state system, which extends social protection for everyone in the country. The system is anchored in a full-employment policy, a steeply progressive taxation system, and a strong, benevolent and resourceful state, endowed with the authority to regulate the economic and social life of people. This system has been established through the institutionalization of various social insurance schemes and schemes for pensions, health care, childcare, free and compulsory education, etc. In the 1990s, the Finnish state experienced an economic crisis, borne out of flawed economic reforms like the deregulation of the financial market and other changes that aimed at hastening Finland’s European Union (EU) membership. The crisis forced the government to tighten the preconditions for availing of welfare benefits. Some notable changes made during the crisis have not yet been rescinded even after it ended. Nevertheless, the crisis underlined the value of the welfare state system in helping ordinary people to successfully insulate themselves against any serious hardship during the period. As a result, the system is very popular in Finland. The Finnish welfare system today faces new challenges emanating from globalization, the EU, demographic changes and structural unemployment.