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Wage Dispersion Between and Within Plants: Sweden 1985-2000

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The Structure of Wages: An International Comparison This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: The Structure of Wages: An International Comparison Volume Author/Editor: Edward P. Lazear and Kathryn L. Shaw, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-47050-4; 978-0-226-47050-4 Volume URL: Conference Date: Publication Date: January 2009 Chapter Title: Wage Dispersion Between and Within Plants: Sweden 1985-2000 Chapter Author: Oskar Nordström Skans, Per-Anders Edin, Bertil Holmlund Chapter URL: Chapter pages in book: (p. 217 - 260) 7.1 Introduction Over the period lasting from the late 1960s to the mid-1980s, Sweden ex- perienced a sharp decline in wage inequality. Overall wage inequality fell along with educational wage differentials and wage differentials between younger and older workers. This development came to a halt in the mid- 1980s, and the subsequent years have seen a reversal of previous trends. The rise in wage inequality since the mid-1980s has been particularly marked for private-sector workers (le Grand et al. 2001). The causes of the fall of Swedish wage inequality have been discussed in Edin and Holmlund (1995), Hibbs (1990), and other contributions. Insti- tutional factors almost certainly played a role. The so-called solidarity wage policy pursued by the major trade union confederation was clearly at- tempting to reduce wage differentials and appeared to have been success- ful in these ambitions. However, there is also evidence that the usual supply and demand factors played some role, in particular concerning the evolu- tion of educational wage differentials. Changes in the university wage pre- mium (college versus high school) are strongly negatively correlated with changes in the relative supply of university educated people in the labor force up to the mid-1990s. From the m

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