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

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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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 700.

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Length: 28 pages
Date of creation: 01 Mar 2007
Date of revision:
Handle: RePEc:hhs:iuiwop:0700
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  1. Juan J. Dolado & Florentino Felgueroso & Juan F. Jimeno, 2000. "The Role of the Minimum Wage in the Welfare State: An Appraisal," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 136(III), pages 223-245, September.
  2. Abowd, John M. & Kramarz, Francis & Margolis, David N. & Philippon, Thomas, 2000. "The Tail of Two Countries: Minimum Wages and Employment in France and the United States," IZA Discussion Papers 203, Institute for the Study of Labor (IZA).
  3. David Naumark & William Wascher, 2003. "Minimum wages, labor market institutions, and youth employment: a cross-national analysis," Finance and Economics Discussion Series 2003-23, Board of Governors of the Federal Reserve System (U.S.).
  4. John M. Abowd & Francis Kramarz & Thomas Lemieux & David N. Margolis, 1997. "Minimum Wages and Youth Employment in France and the United States," NBER Working Papers 6111, National Bureau of Economic Research, Inc.
  5. Per-Anders Edin & Bertil Holmlund, 1995. "The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy?," NBER Chapters, in: Differences and Changes in Wage Structures, pages 307-344 National Bureau of Economic Research, Inc.
  6. Skedinger, Per, 2006. "Minimum wages and employment in Swedish hotels and restaurants," Labour Economics, Elsevier, vol. 13(2), pages 259-290, April.
  7. 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.
  8. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
  9. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, December.
  10. Bazen, Stephen, 2000. "The Impact of the Regulation of Low Wages on Inequality and Labour-Market Adjustment: A Comparative Analysis," Oxford Review of Economic Policy, Oxford University Press, vol. 16(1), pages 57-69, Spring.
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