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Wage and employment determination in volatile times: Sweden 1913-1939

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  • Bertil Holmlund

    (Department of Economics and UCLS, Uppsala University, Uppsala, Sweden)

Abstract

The 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 per worker.

Suggested Citation

  • 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.
    • Handle: RePEc:afc:cliome:v:7:y:2013:i:2:p:131-159
    DOI: 10.1007/s11698-012-0084-9
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    Cited by:

    1. Karlsson Martin & Matvieiev Mykhailo & Obrizan Maksym, 2023. "The Macroeconomic Impact of the 1918–19 Influenza Pandemic in Sweden," The B.E. Journal of Macroeconomics, De Gruyter, vol. 23(2), pages 637-675, June.

    More about this item

    Keywords

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    JEL classification:

    • 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-

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