the best summary of the “Folkhemmet” I’ve found on the web is from the website for a group called “Constitutional Rights in Action”, an American think-tank. Here are the relevant excerpts:
The "Swedish Model": Welfare For Everyone
Sweden has developed a social welfare system that has eliminated poverty by providing extensive government benefits to everyone....The Swedish welfare state (also called the "Swedish Model") is based on the idea that everyone has a right to health care, family services, old-age pensions and other social benefits regardless of income. Since everyone is entitled to these benefits, everyone must pay for them through their taxes.
Sweden began to build its welfare state early in the 20th century and greatly expanded it between 1945 and 1975. Up to the 1970s, the "Swedish Model" succeeded for several reasons. First, the Swedish economy grew steadily during this period. Second, Sweden did not participate in World War II and so, unlike other European nations, it did not have to make a painful recovery from the war. Third, its defense budget was small. Fourth, the country did not have to deal with any immigration problems. Sweden had a small population with a common cultural background. Swedes were proud that their little democratic society had seemingly found a "middle way" between socialism and capitalism.
Building the Welfare State
The welfare state has been the vision of the Swedish Social Democratic Party (SDP), which was founded in 1889. Formed by industrial workers, this political party rejected violent revolution (as inRussia) in favor of democratic social reform. The SDP aimed at building a system that would provide workers (and later all Swedes) with health insurance, old-age pensions, protection from unemployment, and other social benefits financed by taxes on workers and employers. The SDP called its vision for a welfare state “Folkhemmet” (“the people's home.")
The SDP gained control of the government in the 1930s and remained in power for most of the following 60 years. In 1937, the Swedish parliament, called the Riksdag, created a national old-age pension program that remains as the backbone of the welfare state to this day.
The SDP did not want government to take over the ownership of businesses. Instead, SDP leaders realized that government could work with private enterprise, which would produce the economic growth necessary to make the "people's home" possible. Even today, after six decades of welfare-state development, 90 percent of the businesses in Sweden remain in the hands of private owners. Starting in 1938, the Swedish government began to engage in negotiating national wage agreements between employers and labor unions, which currently represent over 80 percent of the workers.
Following World War II, the SDP government greatly expanded the welfare state. It provided a longlist of benefits for all citizens and even immigrant workers. It introduced a national compulsory health insurance system, which was later expanded to include dental care and prescription drugs. It passed into law low-cost housing, child-support payments to parents, child-care subsidies, a mandatory four-week vacation for all workers, unemployment insurance, and additional old-age pension benefits.Most of these things were financed by sharp increases in employer social security taxes. But a booming economy with unemployment usually less than 1 percent made the new social welfare programs possible.
By the mid-1970s, the SDP's had largely realized its vision of a "people's home" welfare state. All Swedes, regardless of need, could call upon the government to provide them with....benefits. Most are available at no charge to the individual or family.... Because of the extensive number of benefits available to all age and income groups, poverty was virtually abolished in Sweden by the 1970s...but there are those who still need extra help during hard economic times or a family crisis.