Wage and Employment Determination in Volatile Times: Sweden 1913-1939
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.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fregert, Klas & Jonung, Lars, 2008.
"Inflation Targeting Is a Success, So Far: 100 Years of Evidence from Swedish Wage Contracts,"
Economics Discussion Papers
2008-24, Kiel Institute for the World Economy (IfW).
- Jonung, Lars & Fregert, Klas, 2008. "Inflation Targeting Is a Success, So Far: 100 Years of Evidence from Swedish Wage Contracts," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-25.
- Nickell, S. & Wadhwani, S., 1989.
"Insider Forces And Wage Determination,"
Economics Series Working Papers
9972, University of Oxford, Department of Economics.
- Fregert, Klas, 2000. "The Great Depression in Sweden as a wage coordination failure," European Review of Economic History, Cambridge University Press, vol. 4(03), pages 341-360, December.
- Timothy J. Hatton & Mark Thomas, 2010.
"Labour markets in the interwar period and economic recovery in the UK and the USA,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 26(3), pages 463-485, Autumn.
- Hatton, Timothy J. & Thomas, Mark, 2010. "Labour Markets in the Interwar Period and Economic Recovery in the UK and the USA," CEPR Discussion Papers 7983, C.E.P.R. Discussion Papers.
- Jonung, Lars, 1979. "Knut wicksell's norm of price stabilization and Swedish monetary policy in the 1930's," Journal of Monetary Economics, Elsevier, vol. 5(4), pages 459-496, October.
- Nadiri, M Ishaq & Rosen, Sherwin, 1969. "Interrelated Factor Demand Functions," American Economic Review, American Economic Association, vol. 59(4), pages 457-71, Part I Se.
- Holmlund, Bertil & Zetterberg, Johnny, 1991.
"Insider effects in wage determination : Evidence from five countries,"
European Economic Review,
Elsevier, vol. 35(5), pages 1009-1034, July.
- Holmlund, B. & Zetterberg, J., 1989. "Insider Effects In Wage Determination: Evidence From Five Countries," Papers 1989a, Uppsala - Working Paper Series.
- Marimon, Ramon & Zilibotti, Fabrizio, 1999.
"Employment and Distributional Effects of Restricting Working Time,"
CEPR Discussion Papers
2127, C.E.P.R. Discussion Papers.
- Marimon, Ramon & Zilibotti, Fabrizio, 2000. "Employment and distributional effects of restricting working time," European Economic Review, Elsevier, vol. 44(7), pages 1291-1326, June.
- Marimon, R. & Zilibotti, F., 1999. "Employment and Distributional Effects of Restricting Working Time," Economics Working Papers eco99/19, European University Institute.
- Gunnar Bardsen & Jurgen A. Doornik & Jan Tore Klovland, 2010. "Wage Formation and Bargaining Power during the Great Depression," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 211-233, 03.
- 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.
- Anders Forslund & Nils Gottfries & Andreas Westermark, 2008. "Prices, Productivity and Wage Bargaining in Open Economies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 169-195, 03.
- Eichengreen, Barry & Hatton, Tim, 1988. "Interwar Unemployment in International Perspective," Institute for Research on Labor and Employment, Working Paper Series qt7bw188gk, Institute of Industrial Relations, UC Berkeley.
- Skans, Oskar Nordstrom, 2004. "The impact of working-time reductions on actual hours and wages: evidence from Swedish register-data," Labour Economics, Elsevier, vol. 11(5), pages 647-665, October.
- Calmfors, Lars & Forslund, Anders, 1991. "Real-Wage Determination and Labour Market Policies: The Swedish Experience," Economic Journal, Royal Economic Society, vol. 101(408), pages 1130-48, September.
- John Hassler & Petter Lundvik & Torsten Persson & Paul Soderlind, 1992. "The Swedish business cycle: stylized facts over 130 years," Discussion Paper / Institute for Empirical Macroeconomics 63, Federal Reserve Bank of Minneapolis.
- Kare Johansen, 1999. "Insider forces in wage determination: new evidence for Norwegian industries," Applied Economics, Taylor & Francis Journals, vol. 31(1), pages 137-147.
- Forslund, Anders & Kolm, Ann-Sofie, 2000. "Active labour market policies and real-wage determination - Swedish evidence," Working Paper Series 2000:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Johansen, Kare, 1996. "Insider Forces, Asymmetries, and Outsider Ineffectiveness: Empirical Evidence for Norwegian Industries 1966-87," Oxford Economic Papers, Oxford University Press, vol. 48(1), pages 89-104, January.
- Jonung, Lars & Wadensjo, Eskil, 1979. " Wages and Prices in Sweden, 1912-1921: A Retrospective Test," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(1), pages 60-71.
- Klovland, Jan T., 1998. "Monetary policy and business cycles in the interwar years: The Scandinavian experience," European Review of Economic History, Cambridge University Press, vol. 2(03), pages 309-344, December.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_3799. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe)
If references are entirely missing, you can add them using this form.