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The Swedish Wage Stucture: The Rise and Fall of Solidarity Wage Policy?

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  • Per-Anders Edin
  • Bertl Holmlund

Abstract

Wage inequality in Sweden declined precipitously during the 1960s and the 1970s. There was a sharp reduction in overall wage dispersion and in the relative earnings advantage of highly-educated workers, a marked narrowing of wage differences between men and women, and a trend increase in youth relative wages. There was also a substantial narrowing of wage differentials among workers within broad occupational and educational groups. The trend decline in wage inequality was broken in the 1980s. Wage differentials along several dimensions have widened modestly from the rnid-1980s to the early 1990s. Much of the Swedish discussion has taken it for granted that the pay compression has been driven by the egalitarian ambitions of strong and coordinated trade unions. Our analysis of the Swedish wage structure suggests that institutions are only part of the story. We show that conventional demand and supply factors can go a substantial way towards explaining some key relative wage movements in Sweden.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4257.

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Date of creation: Jan 1993
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Publication status: published as Per-Anders Edin, Bertil Holmlund. "The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy?," in Richard B. Freeman and Lawrence F. Katz, Editors, "Differences and Changes in Wage Structures" University of Chicago Press (1995)
Handle: RePEc:nbr:nberwo:4257

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  1. Steven J. Davis, 1992. "Cross-Country Patterns of Change in Relative Wages," NBER Working Papers 4085, National Bureau of Economic Research, Inc.
  2. Blanchflower, David G & Oswald, Andrew J & Garrett, Mario D, 1990. "Insider Power in Wage Determination," Economica, London School of Economics and Political Science, vol. 57(226), pages 143-70, May.
  3. Freeman, Richard B., 1987. "Demand for education," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 6, pages 357-386 Elsevier.
  4. Edin, P-A. & Zetterberg, J., 1989. "Inter-Industry Wage Differntials: Evidence From Sweden And A Comparison Withthe United States," Papers 1989f, Uppsala - Working Paper Series.
  5. Forslund, Anders, 1994. "Wage Setting at the Firm Level--Insider versus Outsider Forces," Oxford Economic Papers, Oxford University Press, vol. 46(2), pages 245-61, April.
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