Wage Theories for the Swedish Labour Market

Per Lundborg

No 207, Working Paper Series from Trade Union Institute for Economic Research

Abstract: This paper reviews the empirical literature on tests of different wage theories of relevance in particular to the Swedish labour market. The empirical results are confronted with the institutional changes in the Sweden during the last twenty years. Not much empirical support can be found for the competitive model, the shirking model or the insider-outsider model. The fair wage version of efficiency wage setting receives support, however. Efficiency wage setting appears to have become more important also for Sweden as a consequence of decentralisation of wage bargaining giving scope for firms to differentiate wages. Due to the obvious institutional importance, bargaining models of wage formation continues to play an important role for Swedish wage setting. Bargaining models combined with fair wage setting appear to capture much of present day wage setting in Sweden.

Keywords: Efficiency wages; trade union models (search for similar items in EconPapers)
JEL-codes: J31 J51 J53 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2005-09-23
New Economics Papers: this item is included in nep-lab and nep-ltv
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:fiefwp:0207

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