Statutory Insurance & Workers’ Welfare

This project asks if statutory accident insurance was the starting point for the exceptional expansion of the Swedish welfare state. Our study shows voluntary welfare protection was an integral part of the early-twentieth century welfare system and played a crucial role in protecting workers in the case of sickness and accident; and continued to do so well after the introduction of statutory accident insurance in 1916. Although under-insurance was the main motive for introducing statutory insurance, the government viewed over-insurance through voluntary insurance among workers as a disciplinary problem, due to the risk of moral hazard, both before and after the introduction of statutory accident insurance in 1916. Voluntary initiatives continued to expand throughout the period and were not crowded out by statutory accident insurance. However, statutory insurance did reduce wage increases and the self-insurance capabilities of better paid workers in high-risk industries.