Is the Swedish Model still alive?

Baumol’s cost disease is a wellknown theorem, but its consequences are rarely addressed in economic-political discourse. This paper highlights the implications of Baumol’s cost disease and shows that in real terms the once so celebrated “Swedish Model” has lost its exclusive position relative to other European countries. Even worse, since 1995 Swedish welfare services has in general lost in content when measured in constant prices. This is further aggravated when counted per capita, especially when it comes to elderly care where demands have increased with the growth of the population in higher ages.