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Wage Theories for the Swedish Labour Market

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  • Lundborg, Per

    (Trade Union Institute for Economic Research)

Abstract

This paper reviews the empirical literature on tests of different wage theories of relevance in particular to the Swedish labour market. The empirical results are confronted with the institutional changes in the Sweden during the last twenty years. Not much empirical support can be found for the competitive model, the shirking model or the insider-outsider model. The fair wage version of efficiency wage setting receives support, however. Efficiency wage setting appears to have become more important also for Sweden as a consequence of decentralisation of wage bargaining giving scope for firms to differentiate wages. Due to the obvious institutional importance, bargaining models of wage formation continues to play an important role for Swedish wage setting. Bargaining models combined with fair wage setting appear to capture much of present day wage setting in Sweden.

Suggested Citation

  • Lundborg, Per, 2005. "Wage Theories for the Swedish Labour Market," Working Paper Series 207, Trade Union Institute for Economic Research.
    • Handle: RePEc:hhs:fiefwp:0207
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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