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Union wage effects in Sweden: Evidence from the interwar period

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  • Skoglund, William

Abstract

In this paper, I use a new plant-level dataset to investigate the relationship between wages and the regional strength of unions. Using a shift-share or ’Bartik’ instrumental variables approach, I disentangle the causal effect of union strength on wage levels. I find statistically significant and economically substantial, heterogeneous union wage effects for men with the bottom of the distribution of plants being impacted by union density and the top two-thirds being unaffected. I find a statistically weaker negative effect on wages for women and argue that unions, in general, were uninterested in the issues of women. The paper contributes to the literature by providing the only evidence of a union wage effect in Sweden and, the earliest identified union wage effect anywhere—highlighting the importance of unions in shaping labor market outcomes in the early 20th century and showing that union wage effects are products of their historical and institutional context.

Suggested Citation

  • Skoglund, William, 2025. "Union wage effects in Sweden: Evidence from the interwar period," Explorations in Economic History, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:exehis:v:96:y:2025:i:c:s0014498325000026
    DOI: 10.1016/j.eeh.2025.101655
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    References listed on IDEAS

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    1. Jakob Molinder, 2019. "Wage differentials, economic restructuring and the solidaristic wage policy in Sweden," European Review of Economic History, European Historical Economics Society, vol. 23(1), pages 97-121.
    2. Denis Chetverikov & Bradley Larsen & Christopher Palmer, 2016. "IV Quantile Regression for Group‐Level Treatments, With an Application to the Distributional Effects of Trade," Econometrica, Econometric Society, vol. 84, pages 809-833, March.
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    4. William J. Collins & Gregory T. Niemesh, 2019. "Unions and the Great Compression of wage inequality in the US at mid‐century: evidence from local labour markets," Economic History Review, Economic History Society, vol. 72(2), pages 691-715, May.
    5. Erik Bengtsson, 2014. "Labour's share in twentieth-century Sweden: a reinterpretation," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 62(3), pages 290-314, November.
    6. Erling Barth & Alex Bryson & Harald Dale-Olsen, 2020. "Union Density Effects on Productivity and Wages," The Economic Journal, Royal Economic Society, vol. 130(631), pages 1898-1936.
    7. Kristoffer Collin & Christer Lundh & Svante Prado, 2019. "Exploring regional wage dispersion in Swedish manufacturing, 1860–2009," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 67(3), pages 249-268, September.
    8. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2020. "Bartik Instruments: What, When, Why, and How," American Economic Review, American Economic Association, vol. 110(8), pages 2586-2624, August.
    9. Kerstin Enflo & Martin Henning & Lennart Schön, 2014. "Swedish regional GDP 1855–2000: Estimations and general trends in the Swedish regional system," Research in Economic History, in: Research in Economic History, volume 30, pages 47-89, Emerald Group Publishing Limited.
    10. Alex Bryson, 2007. "The Effect of Trade Unions on Wages," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 33-45.
    11. Roine, Jesper & Waldenstrom, Daniel, 2008. "The evolution of top incomes in an egalitarian society: Sweden, 1903-2004," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 366-387, February.
    12. Fang, Tony & Hartley, John, 2022. "Evolution of Union Wages and Determinants," IZA Discussion Papers 15333, IZA Network @ LISER.
    13. Fregert, Klas, 2000. "The Great Depression in Sweden as a wage coordination failure," European Review of Economic History, Cambridge University Press, vol. 4(3), pages 341-360, December.
    14. Erik Bengtsson & Jakob Molinder, 2017. "The economic effects of the 1920 eight-hour working day reform in Sweden," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 65(2), pages 149-168, May.
    15. Elin Svarstad & Ragnar Nymoen, 2023. "Wage inequality and union membership at the establishment level: An econometric study using Norwegian data," Oxford Economic Papers, Oxford University Press, vol. 75(2), pages 371-392.
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    Cited by:

    1. William Skoglund & Jakob Molinder, 2025. "Unions and the Great Leveling: Evidence from Across the Atlantic," Working Papers 0292, European Historical Economics Society (EHES).
    2. Gunnesmo, Marius F. & Hansen, Casper W., 2026. "Labor-market effects of introducing the 8-hour workday," European Economic Review, Elsevier, vol. 182(C).

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