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Decentralisation of bargaining and manufacturing employment: Sweden 1970-96

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Author Info
Forslund, Anders () (Uppsala University, Department of Economics and Institute for Labour Market Policy Evaluation)
Lindh, Thomas () (Institute for Futures Studies and Uppsala University, Department of Economics)

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Abstract

Swedish unemployment was very low up to the early 1990s when it rose rapidly. At the same time manufacturing employment fell by more than 20 %. The decentralisation of wage bargaining that started in 1983 may have contributed to this by making employment more shock sensitive or by increasing wage mark-ups. In Swedish plant-level data for manufacturing 1970–96 relatively less employment is in low-productivity plants after decentralisation than before, but the correlation between industry wage costs and productivity becomes stronger. Our conclusion is that decentralisation of bargaining in Sweden has not allowed more low-productivity plants in manufacturing to survive. On the contrary, the evidence indicates that a higher wage mark-up may have resulted from the decentralisation. This would weed out low-productivity plants and decrease manufacturing employment.

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Publisher Info
Paper provided by IFAU - Institute for Labour Market Policy Evaluation in its series Working Paper Series with number 2004:3.

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Length: 37 pages
Date of creation: 23 Mar 2004
Date of revision:
Handle: RePEc:hhs:ifauwp:2004_003

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Related research
Keywords: Manufacturing employment; bargaining institutions; industry structure;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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References listed on IDEAS
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    Other versions:
  2. Andersson, Fredrik, 1999. "Job flows in Swedish manufacturing 1972-1996," Working Paper Series 1999:4, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
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    Other versions:
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  13. Sneessens, Henri R & Dreze, Jacques H, 1986. "A Discussion of Belgian Unemployment, Combining Traditional Concepts and Disequilibrium Econometrics," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S89-119, Supplemen. [Downloadable!] (restricted)
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  14. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932.
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