PURPOSE AND IMPLEMENTATION

The purpose of the project was to study, from the perspective of market expansion and integration, the wage levels and changes for different groups of employees in Sweden during the period 1860-2008. It has been essential to establish periods of wage convergence and divergence and the interaction of wages, migration, and institutions. The approach comprised comparisons of occupational groups, branches and economic sectors, and between men and women and white and blue collar workers. In addition, different Swedish regions were compared, as were Sweden and other national economies like Germany, Finland, Belgium, and the Netherlands.  

In essence, the project followed the project plan's purpose and covered all study themes

1) Compilation of homogeneous wage series
All papers include homogeneous wage series, some of which are new.

2) Urban–rural (industrial–agrarian) earnings gap
Analyses were made in four papers (1, 2, 3, 7 in publication list).

3) Wage structure in manufacturing industry
Analyses were made in four papers (10, 11, 14).

4) Regional wage convergence and divergence, and migration
Analyses were made in three papers (4, 5, 13).

5) Comparing the wage trends in Sweden with those in other countries
Four papers adopt a comparative perspective on Swedish wages (6, 8, 9, 11).

THRE MAJOR RESULTS

1) Measurement
In order to compare wages across worker groups, economic sectors, regions or countries, measurement errors need to be avoided. First, time series of wages should be constructed for worker groups that are homogeneous over time. For instance, the fact that occupational titles change in the long-term perspective has to be dealt with. The fact that the official wage statistics does not include separate data for skilled and unskilled workers in industry has been a drawback for Swedish labour market studies. In one paper we develop for the first time a time series for unskilled workers in manufacturing industry 1865–1985 (7). Second, to make worker groups comparable, differences in payments in kind, cost-of-living, working hours and unemployment risk and other disamenities must be taken into consideration. A new method for constructing separate urban and rural cost-of-living indexes was developed for a local study (2) and was later used to study the urban–rural earnings gap for Sweden as a whole (7). 

2) Long-term development and external shocks
Overall, in a long-term perspective wages in Sweden tend to converge, e.g. with regard to geographic region, economic sector, urban-rural locality, industrial branch, and gender (1, 2, 3, 6, 7, 13, 14). However, convergence is not linear; rather the long-term tendency is typically interrupted by periods of stable relative wages or even periods of divergence. Relative wages across regions and economic sectors reflect the degree of market integration and compensating wage differentials. External shocks lead to shifts in relative wages across economic sectors, e.g. the economic depressions in the early 1920s and 1930s, and the Bill on reduction of working hours in 1920 (7). The importance of migration for regional wages changed as emigration decreased during WWI and was low for most of the interwar period (4).

3) Economic and non-economic factors
While relative wages are typically associated with market mechanisms as reflected in product prices and migration flows, results indicate that institutions and political regimes are important in some cases. The reduction of working hours in industry increased the urban-rural wage gap in the 1920s, and the subsequent working hours reform in agriculture in the 1930s reduced the gap (7). Differences across economic sectors in the institutional setting also influenced relative wages beyond the pure market response. German-Swedish differences in social norms and institutions also influenced the development of the gender wage gap in the two countries. On the other hand, the alleged importance for increasing wage compression of Swedish institutions like the solidaristic wage policy, central coordinated wage bargaining and the welfare state is questioned by some results. A sharp reduction in inequality in the 1930s and 1940s preceded the formation of the Welfare state, and most of the compression in wage differentials in industry took place in 1930-1950, before the period of central coordinated wage bargaining (10, 14). 

NEW RESEACH QUESTIONS

1) Labour market outcomes like wages are resultant of market factors on the one hand and institutions and political regime on the other hand. The interplay between the two needs to be explored, especially for periods that deviate from the long-term tendency with regard to relative wages. In order to identify such periods, long-term time series needs to be constructed, in combination with explorative case studies that make the mechanisms of wage formation visible in various regions and industries.

2) Comparison is a powerful research design that should be used for the study of the development of relative wages across countries, regions or industries. Based on national case studies for the context, using long-term wage series, a comparative approach will lead to a better understanding of how the labour market worked in the 19th and 20th century. 

INTERNATIONAL ATTACHMENT

Research and publication within the project has been well-integrated into the international research of the field. Participants in the project have presented papers at over 20 international conferences, and all seven published articles are published in international journals with peer review procedure. Another five papers are in the review process of such journals. Although economic history is not a big discipline, the project and its results are well known within the field. Paper number 6 on the German-Sweden gender gap in earnings was included in a compilation of "the most downloaded articles published in Routledge Social Sciences journals in 2014".

RESEARCH INFORMATION OUTSIDE THE ACADEMY

- Prado, Svante: Löneutveckling för olika arbetarkategorier sedan 1860. Public lecture at Handelshögskolans dag 20 October, 2013.
- Lundh, Christer: Answering questions from journalists.

THREE IMPORTANT PUBLICATIONS  

Lundh and Prado. Markets and politics: The Swedish urban–rural wage gap, 1865–1985 (No. 7)
The paper examines the earnings gap between urban and rural workers in Sweden between 1865 and 1985. Proper measurement by cost-of-living, working hours and unemployment causes most of the nominal gap to disappear. What remains is a long-run equilibrium that was interrupted by major external shocks in the interwar years when the urban wage premium soared. The increase in the wage gap stemmed from asymmetric labor market responses to the external shocks, explained by the dissimilar institutional configurations of the two labor markets.  

Enflo, Lundh and Prado. “The role of migration in regional wage convergence: Evidence from Sweden 1860–1940” (No. 4)
The paper examines whether internal and external migrations caused real wage convergence across Swedish counties in 1860–1940. We find that both internal and external migrations contributed to wage convergence before the First World War and internal migration mainly during the interwar years. The agglomeration effects of urbanization were not sufficiently pervasive to offset the labor supply effects of internal and external migrations.

Gärtner, Svenja. “German stagnation versus Swedish progression: gender wage gaps in comparison, 1960–2006” (No. 6)
The paper compares the development of the gender wage gap in West Germany and Sweden during the period 1960–2006. Despite the economic similarities including broad social safety nets, the gap has developed differently in the two countries since 1960. This analysis accounts for micro- and macroeconomic factors and politics and concludes that norms and traditions penetrate institutional settings and ensnare Germany in a cultural trap with regard to gender equality. While Sweden has moved to a two-earner model, German society expects mothers to stay at home. The micro analysis shows that family concerns (e.g. marriage and motherhood) decrease female income in Germany to a far greater extent than do such factors in Sweden, which can be explained in part by deeply held social attitudes.

All the three papers indicate the strength of comparative design. Results show that wages are shaped via the market, but that the market factors alone do not explain all variation in wages. Papers 7 and 4 point out the specific features of the interwar period, e.g. external shocks, asymmetric responses between economic sectors, and a different role of migration, and paper 6 emphasize the differences in mentality between Germany and Sweden. 

OPEN ACCESS
The publication strategy involves publishing in international peer review journals first choice. Articles become immediately available on-line for Universities that subscribe, and are typically included in JSTOR after two years. Normally journals allow parallel publication (last version of submitted draft) after a period of embargo. We have published all articles that are possible to publish in this way: Papers number 1, 2, 3, 4 and 6 are published by GUP service, University of Gothenburg, and are now available as pdf files in open access.