Wage Dispersion between and within Plants: Sweden 1985-2000

58 Pages Posted: 14 Apr 2007 Last revised: 3 Aug 2010

See all articles by Oskar Nordstrom Skans

Oskar Nordstrom Skans

IFAU - Office of Labour Market Policy Evaluation; IZA Institute of Labor Economics

Per-Anders Edin

Uppsala University - Department of Economics; Centre for Economic Policy Research (CEPR)

Bertil Holmlund

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

Date Written: April 2007

Abstract

The paper describes the Swedish wage distribution and how it correlates with worker mobility and plant-specific factors. It is well known that wage inequality has increased in Sweden since the mid-1980s. However, little evidence has so far been available as to whether this development reflects increased dispersion between plants, between individuals in the same plant, or both. We use a new linked employer-employee data set and discover that a trend rise in between-plant wage inequality account for the entire increase in wage dispersion. This pattern, which remains when we control for observable individual human capital characteristics, may reflect increased sorting of workers by skill levels and/or increased scope for rent sharing in local wage negotiations. Our discussion suggests that both factors may have become more important.

Suggested Citation

Nordstrom Skans, Oskar and Edin, Per-Anders and Holmlund, Bertil, Wage Dispersion between and within Plants: Sweden 1985-2000 (April 2007). NBER Working Paper No. w13021. Available at SSRN: https://ssrn.com/abstract=979926

Oskar Nordstrom Skans (Contact Author)

IFAU - Office of Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden
+46 18 471 70 79 (Phone)

IZA Institute of Labor Economics

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

Per-Anders Edin

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 10 97/7 (Phone)
+46 18 471 70 78 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Bertil Holmlund

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 1122 (Phone)
+46 18 471 1478 (Fax)

HOME PAGE: http://www.nek.uu.se/faculty/holmlund/index.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

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

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