Scandinavian Working Papers in Economics

Working Paper Series,
Trade Union Institute for Economic Research

No 196: International Trade and Inter-Industry Wage Structure in Swedish Manufacturing - Evidence from matched employer-employee data

Nan Nan Lundin and Lihong Yun ()
Additional contact information
Nan Nan Lundin: Trade Union Institute for Economic Research, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden
Lihong Yun: ESI, Postal: Örebro University, and FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden

Abstract: This study examines the inter-industry wage structure in Swedish manufacturing by using matched employer-employee data for the period 1996 to 2000. First, we use detailed individual and job characteristics to estimate industry-specific and time-varying wage premiums. Second, we investigate the impact of international trade on wage premiums, after controlling for effects of domestic competition and technical progress. Our results indicate that industries that face intensive import competition from low-income countries have lower wage premiums. Surprisingly, the wage premiums are not related to export intensities. Furthermore, technical progress, measured by investment in R&D activity, appears to enhance inter-industry wage premiums.

Keywords: Inter-industry wage structure; International trade; Matched employer- employee data

JEL-codes: D24; F10

25 pages, October 7, 2004

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