The final third of the twentieth century represents an important episode in Swedish labor market history. Over that period, the pattern of unionization and the wage distribution co-evolved in interesting ways. From 1968-1983 the unionization rate increased sharply in Sweden, and unions gained more power to influence the wage distribution. These years were characterized by “solidarity wage barga...

This paper estimates wage rates using the Heckman Procedure and a tra­ ditional method. The estimation becomes necessary when the analysis requires a measure of the individual's opportunity cost of time. Since a large fraction of the adults in the sample do not participate in the labor market, the simple estimation by ordinary least squares would cause bias in the coefficients. Labor force part...

Wavelet analysis, although used extensively in many areas of applied sciences, has not yet fully entered the economics discipline, even if many economic processes are the result of the actions of several agents who simultaneously operate at different horizons and/or have different term objectives. Wavelets provide a unique decomposition of time series observations that enable one to decompose t...

Is Inflation Dead? I n the past few years the United States has enjoyed the unique economic duet of very low unemployment and declining price inflation. For decades, we have come to associate tight labor markets with accelerating wages and prices. But in 1997, the unemployment rate sank below 5 percent and neither wage nor price inflation became a problem. Have our inflation processes fundament...

Rigidity in wages has long been thought to impede the functioning of labor markets. One recent strand of the research on wage flexibility in the United States and elsewhere has focused on the possibility of downward nominal wage rigidity and what implications such rigidity might have for the macroeconomy at low levels of inflation. The Great Recession of 2008-09, during which the unemployment r...

This paper examines the impact of unions on unemployment and wages in a dynamic equilibrium search model. Unions impose a minimum wage on employers and ration jobs to ensure that their most senior members are employed. A minimum wage policy is optimal for a utilitarian union that cares equally about its employed and unemployed members. The combination of a minimum wage and rationing by seniorit...

eginning with the important work of Murphy and Welch (1992), a great deal of recent research has attempted to document and explain the dramatic changes in the wage distribution that occurred during the 1980s (see also Katz and Murphy 1992). Practically every income group faced a decline in real wages during the 1980s. However, workers at the 33rd percentile experienced a 14 percent drop in the ...

Estimates of the natural rate of unemployment are important in many macroeconomic models used by economists and policy advisors. This paper shows how such estimates might benefit from closer attention to regional developments. Regional business cycles do not move in lockstep and greater dispersion among regions can affect estimates of the natural rate of unemployment. There is microeconomic evi...