Solidarity as an Engine for Economic Change: The impact of Swedish and US political ideology on wage differentials and structural change

Melike Wulfgramm
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Melike Wulfgramm: Groningen University

No GD-97, GGDC Research Memorandum from Groningen Growth and Development Centre, University of Groningen

Abstract: This paper investigates the impact of interindustry wage distribution on structural change in the Swedish and US manufacturing sector in the 1970s. Structural change in the centralized Swedish labour market reacts far more positive to market pressures towards wage changes than structural change in the decentralized US labour market. Support for the Rehn-Meidner model of solidarity wages and structural change is found. It is shown how opposing ideologies and policy making influence not only the wage pattern but also industry structures of economies.

Date: 2007
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