Although Sweden and Denmark are regarded as typical social democratic welfare states, there are significant differences in the institutional set-up of their skill formation systems. In Sweden, vocational education is fully integrated into secondary education, while Denmark is characterized by strong involvement of employers via workplace-based apprenticeships. This article aims to explain these different paths of development and their political sustainability, while providing general insights on the dynamics of institutional change in advanced political economies. We demonstrate how firm size had crucial implications for skill formation policies during the phase of industrialization, while the partisan balance of power became highly influential in the post-war decades. An additional key observation is that once a critical juncture is passed, actors adopt their strategies and preferences to reflect the new institutional context. As a consequence, the skill formation regimes of both countries remained relatively stable after the 1980s.
