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Survey Evidence on Wage Rigidity: Sweden in the 1990s

Author

Listed:
  • Agell, Jonas

    (Department of Economics, Uppsala University)

  • Lundborg, Per

    (Trade Union Institute for Economic Research)

Abstract

We present the results from a repeat survey on wage rigidity in a sample of 159 Swedish firms, conducted during a prolonged period of very high unemployment and very low inflation. We document the virtual absence of wage cuts, and trace this pervasive nominal rigidity to a set of interacting factors, including the legal status of the wage contract, the structure of bargaining institutions, and the design of social insurance. But employees’ concerns about fairness and relative wages also appear to play an important role. In addition, we report new results on underbidding, efficiency wage mechanisms, and unemployment persistence.

Suggested Citation

  • Agell, Jonas & Lundborg, Per, 1999. "Survey Evidence on Wage Rigidity: Sweden in the 1990s," Working Paper Series 154, Trade Union Institute for Economic Research.
    • Handle: RePEc:hhs:fiefwp:0154
    Note: This paper is a revised version of Working Paper 1999:2 of the Office of Labour Market Policy Evaluation, IFAU, and Working Paper 1999:12 of Department of Economics, Uppsala University.
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    References listed on IDEAS

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    More about this item

    Keywords

    Nominal wage rigidity; Panel data; Recession; Effort models; Unemployment persistence;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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