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Survey Evidence on Wage Rigidity: Sweden in the 1990s

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Author Info
Agell, Jonas () (Department of Economics, Uppsala University)
Lundborg, Per (Trade Union Institute for Economic Research)
Abstract

We present the results from a repeat survey on wage rigidity in a sample of 159 Swedish firms, conducted during a prolonged period of very high unemployment and very low inflation. We document the virtual absence of wage cuts, and trace this pervasive nominal rigidity to a set of interacting factors, including the legal status of the wage contract, the structure of bargaining institutions, and the design of social insurance. But employees’ concerns about fairness and relative wages also appear to play an important role. In addition, we report new results on underbidding, efficiency wage mechanisms, and unemployment persistence.

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Publisher Info
Paper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 154.

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Length: 31 pages
Date of creation: 22 Oct 1999
Date of revision:
Publication status: Published in Scandinavian Journal of Economics, 2003, pages 15-29.
Handle: RePEc:hhs:fiefwp:0154

Note: This paper is a revised version of Working Paper 1999:2 of the Office of Labour Market Policy Evaluation, IFAU, and Working Paper 1999:12 of Department of Economics, Uppsala University.
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Related research
Keywords: Nominal wage rigidity; Panel data; Recession; Effort models; Unemployment persistence;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

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  15. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, vol. 62(1), pages 1-18, March.
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  18. Holden, Steinar, 1994. "Wage bargaining and nominal rigidities," European Economic Review, Elsevier, vol. 38(5), pages 1021-1039, May. [Downloadable!] (restricted)
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