The Wage Bargaining Structure in Norway and Sweden and its Influenceon Real Wage Developments

Alun Thomas

No 1998/174, IMF Working Papers from International Monetary Fund

Abstract: The paper investigates the determinants of wages in the tradables and service sectors in Norway and Sweden. Tradables wages are determined by their own productivity growth whereas service sector wages are influenced by wage growth in the tradables sector. The traditional strong sensitivity of the real wage to changes in the unemployment rate has been virtually eliminated since the recessionary period in the early 1990s in Sweden, and real wages have grown faster than macroeconomic factors alone would suggest. In contrast, real wages have become more sensitive to cyclical conditions in Norway and have grown less rapidly than macroeconomic factors indicate. These changes in the wage process have hindered the development of private sector employment in Sweden but have stimulated private sector employment in Norway.

Keywords: WP; real wage; wage drift; union; nominal wage; wage bargaining; centralized; decentralized; tradables; services; real wage change; aggregate real wage; productivity variable; real wage growth; real wage development; real wages in Norway; Real wages; Wages; Wage adjustments; Unemployment rate (search for similar items in EconPapers)
Pages: 25
Date: 1998-12-01
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1998/174

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