Wage Formation and the Relation between Real Wages and Unemployment in Sweden

Arbeitspapier

This paper examines the determinants of the wage level and the relation between the wage level and unemployment in Sweden between 1982 and 2002, using a cointegrated VAR approach. The long-run relation between wages and unemployment is found to be negative. There is also evidence of large deviations between the development in real wages and the development in productivity, in that the growth in real wages exceeds the growth in labour productivity. The results indicate that rigidities are present in the Swedish labour market and that these rigidities may cause higher unemployment. Furthermore, trade unions are found to have a large influence on the wage formation process.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2006:1

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
• Subject: Wage formation ; Unemployment ; Cointegration ; Common Trends

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Eriksson, Åsa
• Event: Veröffentlichung
• (who): Lund University, School of Economics and Management, Department of Economics
• (where): Lund
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/259924
• Last update: 10.03.2025, 11:45 AM CET