Working Paper Series
The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden
Abstract: Minimum wages in Sweden are collectively agreed and differ
by industry. Within agreements, the rates are also highly differentiated.
Minimum wages are higher in Sweden than in any of the countries with
statutory rates considered in this study. This is line with the view that
minimum wages are higher than otherwise when unions are involved in minimum
wage setting. The reported results for Sweden do no support the suggestion
that adverse employment effects are modest in systems with collectively
agreed rates. This runs counter to the hypothesis that unions and employers
have a good sense of what constitutes a relevant market wage for unskilled
workers and use this information to set minimum wages at appropriate
Keywords: Minimum Wages; Collective Bargaining; (follow links to similar papers)
JEL-Codes: J31; J51; J52; (follow links to similar papers)
28 pages, March 1, 2007
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