The Swedish government’s official policy during the entire post-war period has been to promote employment up to the ordinary retirement age. The central labour market organisations have supported that policy. However, policy on the firm level has been different. Many firms have tried to influence their older workers to leave early. A combination of support from social insurance and occupational insurance schemes and directly from the firms has been used to persuade older workers (and the local unions) to waive their rights to employment, which they have according to the seniority principle. This locally engineered policy found support among employers, local unions and older workers as well.
During the 1990s Sweden experienced a gradual decline in labour force participation. The decline in labour force participation led to initiatives from the government to influence the employment policy of the firms. The government has continued and in several ways recently strengthened its policy to counteract early retirement. However, the extent of early exit has increased.