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Survey Evidence on Wage Rigidity and Unemployment: Sweden in the 1990s

Jonas Agell and Per A. H. Lundborg

No 1999:12, Working Paper Series from Uppsala University, Department of Economics

Abstract: This study reports the results from a repeat survey among managers in Swedish manufacturing, designed to explore how a severe and prolonged macroeconomic shock affects wage rigidity and unemployment. Our second survey was conducted in 1998, when the unemployment rate was much higher, and the inflation rate much lower, than when we conducted the first survey in 1991. We find no evidence that the increase in unemployment has softened the mechanisms generating wage rigidity. On the contrary, we conclude that – because of severe downward nominal wage rigidity – real wages have become more rigid during Sweden’s move to a low-inflation environment. We also report a range of new evidence on underbidding, efficiency wage mechanisms, job security legislation, workers’ wage norms, and to what extent the long-term unemployed are subject to statistical discrimination.

Keywords: Unemployment; wage rigidity; repeat survey; recession (search for similar items in EconPapers)
JEL-codes: E24 J41 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his and nep-lab
Date: 1999-06-29
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Published in Scandinavian Journal of Economics, 2003, pages 15-29.

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Related works:
Journal Article: Survey Evidence on Wage Rigidity and Unemployment: Sweden in the 1990s (2003) Downloads
Working Paper: Survey Evidence on Wage Rigidity and Unemployment: Sweden in the 1990s (1999)
Working Paper: Survey evidence on wage rigidity and unemployment: Sweden in the 1990s (1999) Downloads
Working Paper: Survey evidence on wage rigidity and unemployment: Sweden in the 1990s Downloads
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