the Political Economy of Wage-Earner funds: Policy Debate and Swedish Experience

A wage-earners' investment fund would receive income from taxation use it to accumulate capital on behalf of wage-earners. The paper briefly surveys the various wage-earner fund proposals advanced in Europe during the 1970s and 1980s. It then analyses the arguments for and against wage-earner funds and shows that the European debate on this issue has involved much more than a purely rational appraisal of the economic costs and benefits of the various policy options. the paper then examines the experience of wage-earner funds in Sweden, the only country in which such funds have actually been established. Institutional aspects of the Swedish funds are discussed, as are their behavior and performance.