Wage and Employment Determination in Volatile Times: Sweden 1913–1939
AbstractThe paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at an annual rate of 30 percent followed by a period of sharp deflation where nominal wages and prices fell by 30 percent and unemployment increased from 5 to 30 percent. We examine whether relatively standard wage and employment equations can account for the volatile economic development during the interwar years. By and large, the answer is a qualified yes. Industry wages were responsive to industry-specific firm performance, suggesting a significant role for “insider forces” in wage determination. Unemployment had a strong downward impact on wages. There is evidence that reductions in working time added to wage pressure; yet estimates of labor demand equations suggest that cuts in working time may have slightly increased employment as firms substituted workers for hours.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2012:9.
Length: 43 pages
Date of creation: 18 Apr 2012
Date of revision:
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
Wage determination; labor demand; interwar labor markets;
Other versions of this item:
- Bertil Holmlund, 2013. "Wage and employment determination in volatile times: Sweden 1913-1939," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 7(2), pages 131-159, May.
- Holmlund, Bertil, 2012. "Wage and Employment Determination in Volatile Times: Sweden 1913-1939," IZA Discussion Papers 6509, Institute for the Study of Labor (IZA).
- Bertil Holmlund, 2012. "Wage and Employment Determination in Volatile Times: Sweden 1913-1939," CESifo Working Paper Series 3799, CESifo Group Munich.
- Holmlund, Bertil, 2012. "Wage and Employment Determination in Volatile Times: Sweden 1913–1939," Working Paper Series, Center for Labor Studies 2012:7, Uppsala University, Department of Economics.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
- N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-02 (All new papers)
- NEP-HIS-2012-05-02 (Business, Economic & Financial History)
- NEP-LAB-2012-05-02 (Labour Economics)
- NEP-LMA-2012-05-02 (Labor Markets - Supply, Demand, & Wages)
- NEP-LTV-2012-05-02 (Unemployment, Inequality & Poverty)
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