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The Wage Curve in the Nordic Countries

Research output: Book/anthology/dissertation/reportBook

This report focusses on wage formation in the Nordic countries with a special attention to the effect from changes in local unemployment on the local wage level. The book gives a comprehensive and comparable study of this topic in the five Nordic countries which may be of great value for researchers or civil servants with a deeper interest in labour market problems. The main result from this study is that the wage formation at the regional level is rather inflexible in the short run in all five Nordic countries, with no effect from changes in local unemployment on the local wage level. This result is contrary to earlier studies that observed a negative relationship between the level of unemployment and wages across regions. However, while there is no regional wage responsiveness to unemployment in the short run, the wage adjustment moves in the direction of lower wages in high unemployment regions in the long run. One explanation put forward for this slow speed of regional wage adjustment is the rather centralized bargaining system on the labour market in the Nordic countries. Wages are set according to the average unemployment rate for the economy as a whole, and differences in regional unemployment are not taken into consideration at the central level of wage negotiations
Original languageEnglish
Place of publicationCopenhagen
PublisherNordic Council of Ministers
Number of pages109
Publication statusPublished - 1999

    Research areas

  • Wage curve, Wage formation, Phillips curve, Labour market, Unemployment, Regional labourmarkets

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