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The Employers in the Swedish Model The Importance of Labour Market Competition and Organisation

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    The way the labour market functions is a crucial factor in any analysis of the Swedish model. Full employment contributed to the growth of what were probably the two most important institutions in this model: centralised negotiations between the social partners and, secondly, the Rehn-Meidner model, involving pay policies based on solidarity with the low-paid. Here, we have examined the role of the employers in the rise, application and fall of the centralised bargaining model. In this respect, the Swedish Metal Trades Employers' Association (VF), the largest and most important employer organisation in the peak association SAF, was the actor whose interests eventually led to the model's demise. The principal cause was discontent over the way this bargaining model worked in practice. The engineering industries felt their interests were being neglected in the giant employer collective. This empirical investigation into an employer organisations's internal actions, combining economic history with organisation theory, shows the importance of the market mechanism for employer policy during full employment. They sought a solution to the problem of wage drift. Significantly, it began by helping to push through centralised bargaining in the 1950s. When wage drift subsequently showed a tendency to decline towards the end of the 1970s, this was seen as a result of more extensive local and regional organisation. Competition and wage drift, it was felt, could be handled better through local collaboration than through large-scale collective action. One of the institutions of the Swedish model had thereby met its end.

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    File URL: http://www.framtidsstudier.se/wp-content/uploads/2011/01/20051201134724filu1o0BF0CUnY11a3A2E5z.pdf
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    Paper provided by Institute for Futures Studies in its series Arbetsrapport with number 2005:2.

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    Length: 23 pages
    Date of creation: Feb 2005
    Date of revision:
    Handle: RePEc:hhs:ifswps:2005_002
    Note: ISSN 1652-120X ISBN 91-89655-60-5
    Contact details of provider: Postal: Institute for Futures Studies, Box 591, SE-101 31 Stockholm, Sweden
    Phone: 08-402 12 00
    Fax: 08-24 50 14
    Web page: http://www.framtidsstudier.se
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    1. Malmberg, Bo & Sommestad, Lena, 2000. "Tunga trender i den globala utvecklingen," Arbetsrapport 2000:2, Institute for Futures Studies.
    2. Lagerlöf, Nils-Petter, 2001. "From Malthus to Modern Growth: Can Epidemics Explain the Three Regimes?," Arbetsrapport 2001:1, Institute for Futures Studies.
    3. Ranehill, Eva, 2002. "Social snedrekrytering till högre studier - En litteraturöversikt," Arbetsrapport 2002:10, Institute for Futures Studies.
    4. Galor, Oded & Moav, Omer, 2000. "Natural Selection and the Origin of Economic Growth," Arbetsrapport 2000:5, Institute for Futures Studies.
    5. Lindh, Thomas & Malmberg, Bo, 2002. "Swedish post-war economic development. The role of age structure in a welfare state," Arbetsrapport 2003:4, Institute for Futures Studies.
    6. Lundqvist, Torbjörn, 2002. "Arbetskraft och konkurrensbegränsning; aktörsperspektiv på den svenska modellen och framtiden," Arbetsrapport 2002:1, Institute for Futures Studies.
    7. Wasmer, Etienne, 2002. "Interpreting Europe and US Labor Markets Differences: The Specificity of Human Capital Investments," IZA Discussion Papers 549, Institute for the Study of Labor (IZA).
    8. Dahlberg, Susanne & Nahum, Ruth-Aïda, 2003. "Cohort Effects on Earnings Profiles: Evidence from Sweden," Working Paper Series 2003:11, Uppsala University, Department of Economics.
    9. Malmberg, Bo & Lindh, Thomas, 2004. "Forecasting global growth by age structure projections," Arbetsrapport 2004:5, Institute for Futures Studies.
    10. Palme, Mårten & Svensson, Ingemar, 2002. "Pathways to Retirement and Retirement Incentives in Sweden," Arbetsrapport 2002:9, Institute for Futures Studies.
    11. Barnekow, Erik, 2002. "Demografi och finansmarknad - en översikt av empirisk forskning," Arbetsrapport 2002:7, Institute for Futures Studies.
    12. Sommestad, Lena, 2001. "Health and Wealth: The Contribution of Welfare State Policies to Economic Growth," Arbetsrapport 2001:3, Institute for Futures Studies.
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