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Active labour market policies and real-wage determination - Swedish evidence

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Author Info

  • Forslund, Anders

    () (IFAU - Office of Labour Market Policy Evaluation)

  • Kolm, Ann-Sofie

    () (IFAU - Office of Labour Market Policy Evaluation)

Abstract

A number of earlier studies have examined whether extensive labour market programmes (ALMPs) contribute to upward wage pressure in the Swedish economy. Most studies on aggregate data have concluded that they actually do. In this paper we look at this issue using more recent data to check whether the extreme conditions in the Swedish labour market in the 1990s and the concomitant high levels of ALMP participation have brought about a change in the previously observed pattern. We also look at the issue using three different estimaton methods to check the robustness of the results. Our main finding is that, according to most estimates, ALMPs do not seem to contribute significantly to an increased wage pressure.

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Bibliographic Info

Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2000:7.

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Length: 118 pages
Date of creation: 08 Nov 2000
Date of revision:
Handle: RePEc:hhs:ifauwp:2000_007

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Keywords: Labour market policies; Real-wage determination;

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References

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  1. C Bean, 1992. "European Unemployment: A Survey," CEP Discussion Papers dp0071, Centre for Economic Performance, LSE.
  2. Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107.
  3. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
  4. Dahlberg, M. & Forslund, A., 1999. "Direct Displacement Effects of Labour Market Programmes: the Case of Sweden," Papers 1999:22, Uppsala - Working Paper Series.
  5. Edin, P-A. & Holmlund, B., 1990. "Unemployment, Vacancies And Labour Market Programmes: Swedish Evidence," Papers 1990j, Uppsala - Working Paper Series.
  6. Kurt Brännäs & Henry Ohlsson, 1999. "Asymmetric Time Series and Temporal Aggregation," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 341-344, May.
  7. Bean, C R & Layard, P R G & Nickell, S J, 1986. "The Rise in Unemployment: A Multi-country Study," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S1-22, Supplemen.
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Citations

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Cited by:
  1. Agell, Jonas & Bennmarker, Helge, 2002. "Wage Policy and Endogenous Wage Rigidity: A Representative View from the Inside," Research Papers in Economics 2002:12, Stockholm University, Department of Economics.
  2. Lindblad, Hans & Sellin, Peter, 2003. "The Equilibrium Rate of Unemployment and the Real Exchange Rate: An Unobserved Components System Approach," Working Paper Series 152, Sveriges Riksbank (Central Bank of Sweden).
  3. Johansson, Kerstin, 2002. "Labor Market Programs, the Discouraged-Worker Effect, and Labor Force Participation," Working Paper Series 2002:16, Uppsala University, Department of Economics.
  4. Barkbu,B.B. & Nymoen,R. & Roed,K., 2001. "Wage coordination and unemployment dynamics in Norway and Sweden," Memorandum 11/2001, Oslo University, Department of Economics.
  5. Van der Linden, Bruno & Dor, Eric, 1998. "The net effect of unemployment benefits, sanctions and training on aggregate unemployment outflows," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2000020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 07 Sep 2000.
  6. Anders Forslund & Nils Gottfries & Andreas Westermark, 2006. "Real and Nominal Wage Adjustment in Open Economies," CESifo Working Paper Series 1649, CESifo Group Munich.
  7. Bertil Holmlund, 2012. "Wage and Employment Determination in Volatile Times: Sweden 1913-1939," CESifo Working Paper Series 3799, CESifo Group Munich.
  8. Michael Lechner, 2002. "Eine wirkungsorientierte aktive Arbeitsmarktpolitik in Deutschland und der Schweiz: Eine Vision - zwei Realitäten," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 159-174, 05.
  9. Van der Linden, Bruno & Dor, Eric, 2001. "Labor Market Policies and Equilibrium Employment : Theory and Application for Belgium," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001005, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  10. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
  11. Fregert, Klas & Pehkonen, Jaakko, 2008. "Causes of structural unemployment in Finland and Sweden 1990-2004," Working Papers 2008:14, Lund University, Department of Economics.
  12. Bruno Van der Linden & Eric Dor, 2003. "The net effect of unemployment benefits, sanctions and training on regular employment," Working Papers 2003-ECO-01, IESEG School of Management.
  13. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
  14. Johansson, Kerstin, 2002. "Labor market programs, the discouraged-worker effect, and labor force participation," Working Paper Series 2002:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  15. Sianesi, Barbara, 2001. "An evaluation of the active labour market programmes in Sweden," Working Paper Series 2001:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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