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CHAPTER 3
Special studies with 1997 up-date, Sweden
This chapter focuses on two topics. The first is a kind of sensitivity calculation, where the
impact of variations in the APW gross wage income on the changes in disposable income
caused by the different ’events’ is studied. The variation is generated by the difference
between projected APW gross wage income and ’correct’ APW gross wage income for the
Swedish APW, cf. below for a definition.
The other topic is a short history of major changes in the Swedish tax/benefit system since
the early 1990es. The calculations based upon ’correct’ APW gross wage income are used
to illustrate the impact of the changes in the Swedish tax and benefit schemes from 1991
to 1996. For 1997 the calculations contained in this edition of ’Elements’ have been
applied.
3.1.
APW-calculations based upon projected and ’correct’ data
The calculations of impacts on disposable income of the APW from different ’events’ are
based upon projected data in each edition of ’Elements of Social Security’. If these projec-
tions are inaccurate it will have an impact on the calculated results i.e. replacement rates
or changes in disposable income. How significant is this impact? In order to answer that
question the calculations from 1991 to 1996 for the Swedish APW have been repeated, this
time using ’correct’ data, and the results of the repeated calculations have been compared
with the original calculations in the respective editions of ’Elements’.
’Correct’ data are defined as the 1995 edition of ’The Tax/Benefit Position of Production
Workers’ from OECD for the years 1991-1994 and the 1996 and 1997 editions of 
The
Tax/Benefit Position of Employees' for the years 1995 and 1996 respectively. The OECD
publications cover the position of the fully employed production worker or employee. The
calculation of the benefits has been carefully checked by the Swedish Ministry of Finance,
so ’correct’ data supplemented by checks from the Swedish experts constitute the best
possible basis for the calculations. Even the rounding rules in the Swedish taxation scheme
have been implemented in the calculations based upon ’correct’ data.

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Sweden was chosen because the Swedish system is a mix of ’income related’ and ’flat rate’
benefits and because there were both minor (1991, 1992 and 1995), ’medium’ (1994) and
rather substantial (1993 and 1996) projection errors of the APW-income level. Finally the
Swedish Ministry of Finance was willing to participate in these very detailed calculations,
which without this help would not have been possible.
The repeated calculations are primarily to evaluate the calculations based upon projected
data, but they also tell about the impact of the changes in the Swedish taxation and social
security system over the period 1991-96, cf. section 3.2.
The basic APW-calculations for the 6 years from ’Elements’ and ’correct’ data are con-
tained in table 3.1.
Table 3.1.
Sweden, single APW.
SEK
Used in:
1991
1992
1993
1994
1995
1996
’Elements’
Gross wage
162,085
169,700 
178,700
180,000
191,000
200,000
Tax and soc. 
contribution
45,205
47,467 
52,890
55,143
62,315
67,318
Disp. income
116,880
122,233 
125,810
124,857
128,685
132,682
’Correct’ data
Gross wage
162,400
171,000 
173,900
183,100
190,260
204,714
Tax and soc. 
contribution.45,548
47,901
51,246
56,198
62,032
69,069
Disp. income
116,852
123,099
122,654
126,902
128,228
135,645
1)
1)
1)
1)
1)
1)
Source: 1995 edition of ’The Tax/Benefit Position of Production Workers’ and 1996 and 1997 editions of 
The
Tax/Benefit Position of Employees', OECD.
1) ’Correct’ data deviates from the 1995 edition of the OECD publication in which there are minor errors for
Sweden for 1992 and 1994. There is also a minor deviation in 1996 compared to the 1997 edition of the
OECD publication.
Note that disposable income (’correct’ data) is lower in 1993 than in 1992, this will be of
importance later, cf. section 3.2.
The calculations based upon ’Elements’ and ’correct’ data are presented in table 3.2. For
illness it is only the ’insurance’ case which is included in the table. For 1993 it is ’the new
rules’ for illness and unemployment benefits which are contained in the calculations. The
new cases from the 1993 edition of ’Elements’ have also been calculated for 1991 and
1992 but only based upon ’correct’ data.

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