Swimming with the tide: solidarity wage policy and the gender earnings gap

The purpose of this paper is to examine the role of wage compression for the gender wage gap in Sweden during the period 1968-1991. We find that the effects of changes in the wage structure on women's wages have varied over time and have had partly counteracting effects. Changes in industry wage differentials have systematically worked against women, while the changes in the returns to human capital and unobserved characteristics have contributed to reductions in the gender wage gap. Changes in the wage structure were particularly important between 1968 and 1974, when the reduction of overall wage inequality was dramatic. In 1981, however, the wage compression effect accounted only for a minor proportion of women's relative wage gains, as compared to 1974. At this time, women gained in relative wages mainly because discrimination was mitigated and/or the gender gap in unobserved skills was reduced. Between 1981 and 1991 there is a small increase in the gender wage gap. This small increase seems to have been driven by changed inter-industry wage differentialsGender wage gap; Wage structure

Time out of work and skill depreciation

This paper investigates the role of skill depreciation in the relationship between work interruptions and subsequent wages. Using unique longitudinal microdata containing information on the ability to understand and practically employ printed information, we are able to analyze changes in skills for individuals as a function of time out of work. In general, we find statistically strong evidence of a negative relationship between work interruptions and skills. Our analysis suggests that depreciation of general information-processing skills is economically significant, with a full year of non-employment being equivalent to moving 5 percentiles down the skill distribution.Work interruptions; skill depreciation; wage differentials

Swimming With the Tide: Solidarity Wage Policy and the Gender Earnings Gap

The purpose of this paper is to examine the role of wage compression for the gender wage gap in Sweden during the period 1968-1991. We find that the effects of changes in the wage structure on women’s wages have varied over time and have had partly counteracting effects. Changes in industry wage differentials have systematically worked against women, while the changes in the returns to human capital and unobserved characteristics have contributed to reductions in the gender wage gap. Changes in the wage structure were particularly important between 1968 and 1974 when the reduction of overall wage inequality was dramatic. In 1981, however, the wage compression effect accounted only for a minor proportion of women's relative wage gains, as compared to 1974. At this time, women gained in relative wages mainly because discrimination was mitigated and/or the gender gap in unobserved skills was reduced. Between 1981 and 1991 there is a small increase in the gender wage gap. This small increase seems to have been driven by changed inter-industry wage differentials.Gender wage differentials; trade union; wage structure

Time Out of Work and Skill Depreciation

This paper investigates the role of skill depreciation in the relationship between work interruptions and subsequent wages. Using a unique longitudinal dataset, the Swedish part of the International Adult Literacy Survey, we are able to analyze changes in literacy skills for individuals as a function of time out of work. In general, we find statistically strong evidence on a negative relationship between work interruptions and skills. Our analysis suggests that depreciation of general (literacy) skills is economically significant. Our estimates imply that a full year of non-employment is associated with skill losses that are equivalent to moving 5 percentiles down the skill distribution.Work interruptions; Skill depreciation; Unemployment; Wage differentials

The Swedish Youth Labor Market in Boom and Depression

This paper is concerned with the labor market experience of Swedish youths during the 1980s and the 1990s. The first objective is to portray early economic attainment among young Swedes. The second objective of the paper is to examine the impact of labor market programs on youth employment. We find that the slump in the 1990s has been associated with dramatic increases in youth unemployment and youth participation in active labor market programs. The impact on unemployment rates by age and education has been roughly proportional, however. The evolution of employment and unemployment does not offer much ground for the popular hypothesis that the recent rise in unemployment is driven by large and pervasive shifts in the demand for labor by skill attributable to technological innovation. The employment crisis has been met by an unprecedented increase in active labor market programs, in large part targeted at unemployed youths. There is a risk that these programs may crowd out regular youth employment, a hypothesis that is supported in our empirical investigation of regular youth employment in Swedish municipalities.Employment; Unemployment; Wages; Labour force and employment; Size and structure; Employment determination; Demand for labour

Trade, Earnings, and Mobility - Swedish Evidence

Using a large longitudinal data set, we study the effects of increased trade on earnings and mobility in the Swedish labor market in the late 1980s and early 1990s. Earnings respond significantly to changes in industry sales, whether generated by domestic market forces or international trade: Swedish exports (imports) raise (lower) annual earnings, but changes in trade affect earnings just as any other shift in market conditions. In general, the wage effects are small; the prime response to changes in the product market appears to be variations in employment. We also examine whether trade has differential effects across skill groups. However, we do not find systematic differences in the effects of trade across the earnings distribution.International Trade; Earnings; Mobility

LINDA - Longitudinal INdividual DAta for Sweden

This paper presents LINDA - a register-based longitudinal data set for Sweden. LINDA consists of a large panel of individuals, and their household members, which is representative for the population during the period 1960 to 1998. As future years become available, this information will be added to the data set. LINDA also includes a specific sample of immigrants. This sample has the same design and covers the same time period as the population sample. We provide a description of the sources of data, the sampling frame as well as the sampling procedure. Moreover, to illustrate the usefulness and particular features of LINDA, we give the development of some of the key variables in the data set.Longitudinal data; Population sample; Immigrant sample; Sweden