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Wage Theories for the Swedish Labour Market

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  • Lundborg, Per

    (Trade Union Institute for Economic Research)

Abstract

This paper reviews the empirical literature on tests of different wage theories of relevance in particular to the Swedish labour market. The empirical results are confronted with the institutional changes in the Sweden during the last twenty years. Not much empirical support can be found for the competitive model, the shirking model or the insider-outsider model. The fair wage version of efficiency wage setting receives support, however. Efficiency wage setting appears to have become more important also for Sweden as a consequence of decentralisation of wage bargaining giving scope for firms to differentiate wages. Due to the obvious institutional importance, bargaining models of wage formation continues to play an important role for Swedish wage setting. Bargaining models combined with fair wage setting appear to capture much of present day wage setting in Sweden.

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Bibliographic Info

Paper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 207.

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Length: 25 pages
Date of creation: 23 Sep 2005
Date of revision:
Handle: RePEc:hhs:fiefwp:0207

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Keywords: Efficiency wages; trade union models;

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References

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  1. Anna Larsson, 2004. "The Swedish real exchange rate under different currency regimes," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 140(4), pages 706-727, December.
  2. Alexius, Annika, 2001. "How to Beat the Random Walk," Working Paper Series 175, Trade Union Institute for Economic Research.
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  17. Arai, Mahmood & Vilhelmsson, Roger, 2001. "Immigrants' and Natives' Unemployment-risk: Productivity Differentials or Discrimination?," Working Paper Series 169, Trade Union Institute for Economic Research.
  18. Heyman, Fredrik, 2002. "Wage Dispersion and Job Turnover: Evidence from Sweden," Working Paper Series 181, Trade Union Institute for Economic Research.
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