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Wage differentials, economic restructuring and the solidaristic wage policy in Sweden

Molinder, Jakob LU (2019) In European Review of Economic History 23(1). p.97-121
Abstract
The Swedish model has been seen as way to combine rapid growth with small wage gaps. The solidaristic wage policy negotiated by peak organizations between 1956 and 1983 was designed to induce restructuring by reducing wage differences across the economy. Several authors have linked this to decreased wage dispersion and rapid structural change, especially during the 1960s. However, there is disagreement on when the policy started to affect dispersion and little evidence exist before the 1970s. Using new wage data, I examine differentials using a regression–decomposition framework. The results show that inequality was stable before the late-1960s but declined rapidly thereafter. According to the decomposition, the decline in the 1970s was... (More)
The Swedish model has been seen as way to combine rapid growth with small wage gaps. The solidaristic wage policy negotiated by peak organizations between 1956 and 1983 was designed to induce restructuring by reducing wage differences across the economy. Several authors have linked this to decreased wage dispersion and rapid structural change, especially during the 1960s. However, there is disagreement on when the policy started to affect dispersion and little evidence exist before the 1970s. Using new wage data, I examine differentials using a regression–decomposition framework. The results show that inequality was stable before the late-1960s but declined rapidly thereafter. According to the decomposition, the decline in the 1970s was the likely result of deliberate union policy while developments in the 1960s were unrelated to union action. In contrast to what some authors have argued, this study shows that decreased wage dispersion coincided with a fall in growth and structural change. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
solidaristic wage policy, Sweden, wages, wage differentials, labor markets, economic restructuring
in
European Review of Economic History
volume
23
issue
1
pages
97 - 121
publisher
Cambridge University Press
external identifiers
  • scopus:85063510159
ISSN
1474-0044
language
English
LU publication?
yes
id
f89023e1-c82e-4152-94e6-8be85a3bf94a
alternative location
http://10.1093/ereh/hey005
date added to LUP
2018-12-14 10:28:56
date last changed
2019-04-30 04:06:16
@article{f89023e1-c82e-4152-94e6-8be85a3bf94a,
  abstract     = {The Swedish model has been seen as way to combine rapid growth with small wage gaps. The solidaristic wage policy negotiated by peak organizations between 1956 and 1983 was designed to induce restructuring by reducing wage differences across the economy. Several authors have linked this to decreased wage dispersion and rapid structural change, especially during the 1960s. However, there is disagreement on when the policy started to affect dispersion and little evidence exist before the 1970s. Using new wage data, I examine differentials using a regression–decomposition framework. The results show that inequality was stable before the late-1960s but declined rapidly thereafter. According to the decomposition, the decline in the 1970s was the likely result of deliberate union policy while developments in the 1960s were unrelated to union action. In contrast to what some authors have argued, this study shows that decreased wage dispersion coincided with a fall in growth and structural change.},
  author       = {Molinder, Jakob},
  issn         = {1474-0044},
  keyword      = {solidaristic wage policy,Sweden,wages,wage differentials,labor markets,economic restructuring},
  language     = {eng},
  number       = {1},
  pages        = {97--121},
  publisher    = {Cambridge University Press},
  series       = {European Review of Economic History},
  title        = {Wage differentials, economic restructuring and the solidaristic wage policy in Sweden},
  volume       = {23},
  year         = {2019},
}