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Wage restraint in Scandinavia: during the postwar period or the neoliberal age?

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  • Erik Bengtsson

Abstract

An influential interpretation of the strong growth performance in Western Europe in the 1950s and 1960s stresses the importance of wage restraint, trade unions holding back wages to increase investments. This article questions that interpretation, using a wage regression approach with eighty-five to ninety-six years of data on wages, inflation, unemployment, productivity, and other variables in Denmark, Norway, and Sweden, focusing on the post-1950 period. It is shown that wages in fact increased faster than productivity in Sweden in the 1950s and 1960s and in Denmark and Norway in the 1960s. On the other hand, especially Denmark and Sweden saw wage restraint in the 1980s and 1990s. Overall the results of the article support a power-oriented interpretation of wage bargaining rather than the conventional postwar wage restraint story. In explaining the differences between the countries, the article discusses economic structure, post–World War II situation, and trade union ideology.

Suggested Citation

  • Erik Bengtsson, 2015. "Wage restraint in Scandinavia: during the postwar period or the neoliberal age?," European Review of Economic History, European Historical Economics Society, vol. 19(4), pages 359-381.
    • Handle: RePEc:oup:ereveh:v:19:y:2015:i:4:p:359-381.
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    File URL: http://hdl.handle.net/10.1093/ereh/hev008
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    References listed on IDEAS

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    1. Broadberry,Stephen & O'Rourke,Kevin H., 2010. "The Cambridge Economic History of Modern Europe," Cambridge Books, Cambridge University Press, number 9780521708395, January.
    2. Stockhammer, Engelbert, 2011. "Wage-led growth: An introduction," Economics Discussion Papers 2011-1, School of Economics, Kingston University London.
    3. Daniel J. B. Mitchell, 1985. "Shifting Norms in Wage Determination," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 575-608.
    4. Barkbu, Bergljot Bjornson & Nymoen, Ragnar & Roed, Knut, 2003. "Wage coordination and unemployment dynamics in Norway and Sweden," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(1), pages 37-58, March.
    5. Ramana Ramaswamy, 1994. "The Structural Crisis in the Swedish Economy: Role of Labor Markets," IMF Staff Papers, Palgrave Macmillan, vol. 41(2), pages 367-379, June.
    6. C. Naastepad & Servaas Storm, 2006. "OECD demand regimes (1960-2000)," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 29(2), pages 211-246.
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    Cited by:

    1. Bengtsson, Erik, 2023. "The politics of profits: Profit squeeze and political-economic change in Sweden, 1975–1985," Lund Papers in Economic History 250, Lund University, Department of Economic History.
    2. Molinder, Jakob, 2019. "Why Was Unemployment so Low in Postwar Sweden? An Analysis with New Unemployment Data by Manufacturing Industry, 1935-1948," Lund Papers in Economic History 201, Lund University, Department of Economic History.
    3. Eric Bengtsson & Engelbert Stockhammer, 2018. "Wages, income distribution and economic growth in Scandinavia," Working Papers PKWP1811, Post Keynesian Economics Society (PKES).
    4. Bengtsson, Erik, 2023. "The Changing Meaning of the Wage Bargaining Round in Sweden since the 1960s: A Contextual Approach to Shifts in Industrial Relations," Lund Papers in Economic History 245, Lund University, Department of Economic History.
    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. Ivan D. Trofimov, 2019. "Stability of Labour Shares: Evidence from OECD Economies," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 17(1), pages 57-89.

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