The Nordic countries are known for their comprehensive welfare states with universal high-quality services and an industrial relations model that fosters competitiveness, high wages and good working conditions. This explains why Nordic solutions are often highlighted as examples for European Union countries, especially in terms of social and labour market policy.

Yet, the Nordic countries also face short-term crises – like the COVID-19 pandemic, whereby sectors of the labour market were adversely affected – and longer-term challenges such as declining fertility rates – potentially undermining the quality of public welfare services.

This paper, co-authored by Professor Trine Larsen, examines how Nordic countries responded to challenges posed by the adverse labour market effects of the COVID-19 pandemic, as it stress-tested the welfare states. We find that the Nordic model has proven to be both flexible and robust in response to acute crises, such as the COVID-19 pandemic. At the same time, the Nordic welfare model continues to be resilient and to sustain social investment, which has changed incrementally, as illustrated by the case of early childhood education and care.