Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311638 
Authors: 
Year of Publication: 
2025
Series/Report no.: 
IFN Working Paper No. 1517
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
The various form of pattern bargaining with manufacturing, as representative of the tradables sector, deciding the norm for wage increases in the Nordic countries are reviewed. This form of bargaining has been consistent with strong international competitiveness and has widespread support among practitioners based on informal analysis. It is, however, hard to build a convincing case in more formal modelling for the idea that wage leadership for the tradables sector is particularly conducive to wage restraint. The conclusion is rather that it is norm setting in itself, irrespective of by whom it is done, that promotes wage moderation. In the future, when changing demograhics may motivate a reallocation of labour to welfare services, a rigid application of international competitiveness norms may imply an undesirable status-quo bias. More weight should probably be given to overall labour market conditions and more relative-wage flexibility allowed.
Subjects: 
Pattern bargaining
coordination of wage setting
the Scandinavian model
Stackelberg leadership
social norms
labour reallocation
JEL: 
E24
J21
J51
Document Type: 
Working Paper

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