Wage formation and business dynamics
The project will shed light on the Swedish labor market models´ functioning and effects. The focus of the project is on the local wage formation and its impact on the economy and on the negotiating system as a whole. How does wage formation function today - local and centralized - in different industries and companies, and what impact does it have on profitability, employment and business development?
Main research problems:
1. How does the system of
wage formation look like today in different sectors and
2. What consequences does it have
on companies' growth potential, for instance; its productivity,
growth and profitability?
3. What type or what types of wage
formation and bargaining system is most constructive in this
4. Are there any good examples
from other countries, such as Germany, Denmark and Finland, from
which Sweden can learn?
5. In which ways do laws and
legislation, the bargaining system itself and other conditions need
Furthermore, the ambition of this project is to contribute to a
broader discussion and spread of knowledge regarding the wage
formation conditions and consequences.
The main hypothesis, based on up-to-date research, is that wage
setting close to the companies - firm-level bargaining or
individualized pay - has a positive effect for growth and business
Those effects on companies' productivity, growth and
profitability are expected to be obtained through greater
flexibility, better experiment possibilities and greater incentives
for employees to do a better job. Employees are also expected to
benefit through higher salaries.
Still, we know too little about how these connections really
look like. The research on local wage bargaining on Swedish
conditions is still very limited. Is the hypothesis correct for all
types of companies and employees despite company size, industry or
sector? And, under which conditions will local wage bargaining give
those positive effects?
Through existing research in the field some major circumstances
can be identified:
- There must be a large enough wage sum on the local level to
- A clear connection between the wage setting and the company's
- That there is sufficient wage spread, this enables wage
differences reflecting the employee's contribution to the results
- That the local managers have the interest, competence and
mandate to set wages.
- That there exists a good local climate of cooperation between
the labor market organizations.
The project is scheduled between 2010 and 2013 and the results
will be reported with articles in scientific journals, books and
newspapers for the general public during the process.
For more information, contact Henrik Lindberg or Nils Karlson.