Working Paper: NBER ID: w13021
Authors: Oskar Nordström Skans; Per Anders Edin; Bertil Holmlund
Abstract: The paper describes the Swedish wage distribution and how it correlates with worker mobility and plant-specific factors. It is well known that wage inequality has increased in Sweden since the mid-1980s. However, little evidence has so far been available as to whether this development reflects increased dispersion between plants, between individuals in the same plant, or both. We use a new linked employer-employee data set and discover that a trend rise in between-plant wage inequality account for the entire increase in wage dispersion. This pattern, which remains when we control for observable individual human capital characteristics, may reflect increased sorting of workers by skill levels and/or increased scope for rent sharing in local wage negotiations. Our discussion suggests that both factors may have become more important.
Keywords: Wage dispersion; Labor mobility; Plant-specific factors
JEL Codes: J31; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| between-plant wage inequality (J31) | wage dispersion (J31) |
| sorting of workers by skill levels across plants (L23) | between-plant wage inequality (J31) |
| rent sharing in local wage negotiations (D33) | sorting of workers by skill levels across plants (L23) |
| wage dispersion (J31) | between-plant wage inequality (J31) |