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The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden

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Abstract

Minimum wages in Sweden are collectively agreed and differ by industry. Within agreements, the rates are also highly differentiated. Minimum wages are higher in Sweden than in any of the countries with statutory rates considered in this study. This is line with the view that minimum wages are higher than otherwise when unions are involved in minimum wage setting. The reported results for Sweden do no support the suggestion that adverse employment effects are modest in systems with collectively agreed rates. This runs counter to the hypothesis that unions and employers have a good sense of what constitutes a relevant market wage for unskilled workers and use this information to set minimum wages at appropriate levels.

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  • Skedinger, Per, 2007. "The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden," Working Paper Series 700, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0700
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    8. Kramarz, Francis & Philippon, Thomas, 2001. "The impact of differential payroll tax subsidies on minimum wage employment," Journal of Public Economics, Elsevier, vol. 82(1), pages 115-146, October.
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    Cited by:

    1. David Domeij & Martin Floden, 2010. "Inequality Trends in Sweden 1978-2004," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 179-208, January.
    2. Christopher Busch & David Domeij & Fatih Guvenen & Rocio Madera, 2022. "Skewed Idiosyncratic Income Risk over the Business Cycle: Sources and Insurance," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(2), pages 207-242, April.
    3. Christopher Busch & David Domeij & Fatih Guvenen & Rocio Madera, 2018. "Asymmetric Business-Cycle Risk and Social Insurance," NBER Working Papers 24569, National Bureau of Economic Research, Inc.
    4. Petri Böckerman & Roope Uusitalo, 2009. "Minimum Wages and Youth Employment: Evidence from the Finnish Retail Trade Sector," British Journal of Industrial Relations, London School of Economics, vol. 47(2), pages 388-405, June.
    5. Wolfgang Ochel, 2008. "Ifo Institute: A statutory minimum wage could weaken collective bargaining coverage in Germany," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(04), pages 19-24, February.
    6. Rocio Madera & Fatih Guvenen & David Domeij & Christopher Busch, 2016. "Asymmetric Business Cycle Risk and Government Policy," 2016 Meeting Papers 1567, Society for Economic Dynamics.
    7. Schwabe Michał, 2014. "Do Legal Barriers Really Protect the Labor Markets? Empirical Evidence of Polish Migrants after 2004," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 43(1), pages 114-127, September.

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    More about this item

    Keywords

    Minimum Wages; Collective Bargaining;

    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
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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