Working Paper No. 700

The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden

Published: March 1, 2007Pages: 28Keywords: Minimum Wages; Collective BargainingJEL-codes: J31; J51; J52

The Design and Effects of Collectively Agreed Minimum Wages: Evidence from Sweden Per Skedinger


Minimum wages in Sweden are collectively agreed and differ by industry. Within agreements, the rates are also highly differentiated. Minimum wages are higher in Sweden than in any of the countries with statutory rates considered in this study. This is line with the view that minimum wages are higher than otherwise when unions are involved in minimum wage setting. The reported results for Sweden do no support the suggestion that adverse employment effects are modest in systems with collectively agreed rates. This runs counter to the hypothesis that unions and employers have a good sense of what constitutes a relevant market wage for unskilled workers and use this information to set minimum wages at appropriate levels.

 

Per Skedinger

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Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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