Unionization and the Evolution of the Wage Distribution in Sweden: 1968 to 2000

32 Pages Posted: 30 Jun 2009

See all articles by James Albrecht

James Albrecht

Georgetown University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Anders Bjorklund

Stockholm University; IZA Institute of Labor Economics

Susan Vroman

Georgetown University; IZA Institute of Labor Economics

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Abstract

We examine the evolution of the Swedish wage distribution over the periods 1968-1981 and 1981-2000. The first period was the heyday of the Swedish solidarity wage policy with strongly equalization clauses in the central wage agreements. During the second period, there was more scope for firm-specific factors to affect wages. We find a remarkable compression of wages across the distribution in the first period, but in the second period, wage growth was quite uniform across the distribution. We decompose these changes across the distribution into two components – those due to changes in the distribution of characteristics such as education and experience and those due to changes in the distribution of returns to those characteristics. The wage compression between 1968 and 1981 was driven by changes in the distribution of returns, but between 1981 and 2000, the change in the distribution of returns was neutral with respect to inequality.

Keywords: wage compression, unionization, quantile regression

JEL Classification: J31, J51

Suggested Citation

Albrecht, James W. and Bjorklund, Anders and Vroman, Susan B., Unionization and the Evolution of the Wage Distribution in Sweden: 1968 to 2000. IZA Discussion Paper No. 4246. Available at SSRN: https://ssrn.com/abstract=1426733

James W. Albrecht (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-6105 (Phone)
202-687-6102 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

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Germany

Anders Bjorklund

Stockholm University ( email )

Swedish Institute for Social Research (SOFI)
S-106 91 Stockholm
Sweden
+46 8 163452 (Phone)
+46 8 154670 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Susan B. Vroman

Georgetown University ( email )

Washington, DC 20057
United States
202-687-6024 (Phone)
202-687-6102 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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