Wage and Employment Determination in Volatile Times: Sweden 1913-1939

Bertil Holmlund ()

No 6509, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at an annual rate of 30 percent followed by a period of sharp deflation where nominal wages and prices fell by 30 percent and unemployment increased from 5 to 30 percent. We examine whether relatively standard wage and employment equations can account for the volatile economic development during the interwar years. By and large, the answer is a qualified yes. Industry wages were responsive to industry-specific firm performance, suggesting a significant role for 'insider forces' in wage determination. Unemployment had a strong downward impact on wages. There is evidence that reductions in working time added to wage pressure; yet estimates of labor demand equations suggest that cuts in working time may have slightly increased employment as firms substituted workers for hours.

Keywords: labor demand; interwar labor markets; wage determination (search for similar items in EconPapers)
JEL-codes: J23 J31 N14 N34 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2012-04
New Economics Papers: this item is included in nep-his, nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Cliometrica, 2013, 7 (2), 131–159

Downloads: (external link)
https://docs.iza.org/dp6509.pdf (application/pdf)

Related works:
Journal Article: Wage and employment determination in volatile times: Sweden 1913-1939 (2013)
Working Paper: Wage and Employment Determination in Volatile Times: Sweden 1913-1939 (2012)
Working Paper: Wage and Employment Determination in Volatile Times: Sweden 1913–1939 (2012)
Working Paper: Wage and Employment Determination in Volatile Times: Sweden 1913–1939 (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6509

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().