Working Paper Series, Swedish Institute for Social Research, Stockholm University
Distributional Effects of Wage Leadership: Evidence from Sweden
Abstract: This paper represents the first analysis of the
consequences of a formal wage leadership, the Swedish Industry Agreement.
We show that leadership in general has implied a lowered wage level for
occupational groups having signed the agreement compared to groups that
have not signed it. This is as expected as wage leadership should stabilize
wage increases. However, the effects differ widely across occupations and
skilled groups that signed the agreement have raised their wage level
compared to otherwise similar workers outside the agreement. The agreement
seems to have had a less binding effect on skilled workers. A possible
explanation is that local wage formation is more common among the skilled
groups. The agreement has increased the wage level among high educated
compared to low educated and thus raised the education premium.
Difference-in-differences models are applied using register data
Keywords: Wage leadership; Differences-in-differences.; (follow links to similar papers)
JEL-Codes: J31; J41; J51; (follow links to similar papers)
23 pages, September 14, 2009
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