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Swemming with the Tide: Solidarity Wage Policy and the Gender Earnings Gap

  • Edin, P.A.
  • Richardson, K.

The purpose of this paper is to examine the role of wage compression for the gender wage gap in Sweden during the period 1968-1991. We find that the effects of changes in the wage structure on women's wages have varied over time and have had partly counteracting effects. Changes in industry wage differentials have systematically worked against women, while the changes in the returns to human capital and unobserved characteristics have contributed to reductions in the gender wage gap. Changes in the wage structure were particularly important between 1968 and 1974 when the reduction of overall wage inequality was dramatic. In 1981, however, the wage compression effect accounted only for a minor proportion of women's relative wage gains, as compared to 1974. At this time, women gained in relative wages mainly because discrimination was mitigated and/or the gender gap in unobserved skills was reduced. Between 1981 and 1991 there is a small increase in the gender wage gap. This small increase seems to have been driven by changed inter-industry wage differentials.

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Paper provided by Uppsala - Working Paper Series in its series Papers with number 1999:11.

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Length: 31 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:fth:uppaal:1999:11
Contact details of provider: Postal: UPPSALA UNIVERSITY, DEPARTMENT OF ECONOMICS, S-751 20 UPPSALA SWEDEN.
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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  1. Suen, Wing, 1997. "Decomposing Wage Residuals: Unmeasured Skill or Statistical Artifact?," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 555-66, July.
  2. Siv Gustafsson & Frank Stafford, 1992. "Child Care Subsidies and Labor Supply in Sweden," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 204-230.
  3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  4. Albrecht, James W. & Edin, Per-Anders & Sundström, Marianne & Vroman, Susan B., 1996. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Working Paper Series 1996:23, Uppsala University, Department of Economics.
  5. Blau, Francine D & Kahn, Lawrence M, 1996. "Wage Structure and Gender Earnings Differentials: An International Comparison," Economica, London School of Economics and Political Science, vol. 63(250), pages S29-62, Suppl..
  6. Per-Anders Edin & Bertl Holmlund, 1993. "The Swedish Wage Stucture: The Rise and Fall of Solidarity Wage Policy?," NBER Working Papers 4257, National Bureau of Economic Research, Inc.
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