Previous research has predominantly analysed the retrenchment of the Swedish welfare state from a long-term perspective, examining restructuring processes from the financial crisis of the early 1990s until recent years. This study instead takes a short-term perspective and focuses on welfare state developments in the post-consolidation phase, after the recovery from the crisis. The aim is to investigate how the fiscal policy reforms introduced during the recovery years forced subsequent governments to continue on the path of "frugality". Specifically, the paper focuses on the effects of austerity politics on two policy domains: income redistribution through the benefit and tax system and the municipalities’ role as social service providers and employers. The analysis indicates that the Swedish model is showing increasing signs of dualisation due to the gradual segmentation of prior universalistic welfare programmes and to the worsening of working conditions in the social service sector.
Keywords: Austerity, dualisation, inequality, Sweden