Carl le Grand

Permanent Disadvantage or Gradual Integration: Explaining the Immigrant-Native Earnings Gap in Sweden

Theoretical explanations suggest that wage differentials between immigrant and native workers are generated either by unequal acquisition of human capital between the groups or by various forms of exclusion of immigrants from fair labor market rewards. We evaluate the labor quality and labor market discrimination hypotheses by using a large sample of Swedish employees in 1995. Our findings show that labor market integration is relatively unproblematic for immigrants from Western countries, whereas immigrants from other countries, especially from Africa, Asia, and Latin America, face substantial obstacles to earnings progress when entering the Swedish labor market. For the latter group of countries, extensive controls for general and country-specific human capital reduce the earnings differentials. However, the remaining gap is of a non-trivial magnitude. Thus, the labor quality hypothesis accounts for a part of the observed native-immigrant wage gap, but the remaining differentials can be interpreted in terms of labor market discrimination.

Explaining the Male-Female Wage Gap: Job Segregation and Solidarity Wage Bargaining in Sweden

The fundamental issue addressed in this paper is why women receive lower wages than men. The relevance of four explanations is investigated: womens responsibility for family and household work, womens lower human capital, compensating wage differentials between men and women, and job segregation The job segregation explanation is given primary attention in these analyses, given that solidarity wage bargaining in Sweden is generally assumed to have promoted equal pay for equal type of job, and hence that no male-female wage differentials ought to exist once the relevant job characteristics are controlled for. Empirical analyses, based on Swedish labour-market data in 1981, show that job segregation indeed explains a sizeable proportion of the gender wage gap, much more than the other three types of factors. A substantial unexplained residual remains, however, net of a large number of individual, family, job and industry characteristics. It is argued that this unexplained wage differential is too large to be explained by misspecification or coarseness of measures The most reasonable interpretation instead is that male and female workers with the same productive attributes, family obligations, and job characteristics receive different hourly wages. The result thus indicates the presence of sex discrimination in the Swedish labour-market, i.e., that solidarity wage bargaining, even at its peak in 1981, did not result in equal treatment of men and women

Class, Occupation, Wages, and Skills: The Iron Law of Labor Market Inequality

Economic inequality in contemporary advanced societies is strongly tied to the variation in wages across occupations. We examine the extent to which this variation is captured by social class and occupational prestige and ask how the associations between class, prestige, and wages can be explained. On the basis of data from 11 countries in the European Social Survey (ESS) 2004, we find (a) that class and prestige account for a very large proportion of the occupational variation in wages; (b) that the tight links between class, prestige, and wages are strongly associated with the skill requirements of jobs but only weakly tied to other positional traits, including authority, autonomy, and scarcity; and (c) that these findings are highly similar in all countries examined. We conclude that the rank order of positions in the labor market is a social constant driven by efficiency requirements of work organizations rather than by the exercise of power. This iron law of labor market inequality clearly contradicts major class theoretical models, including Wrights and Goldthorpes. In addition to empirically refuting contemporary class theory, we offer a number of more conceptual arguments to the same effect. At a macro level, however, power relations arguably affect the rate of economic inequality by determining the reward distance between positions in the constant rank order, as indicated by the large cross-national variation in wage dispersion.

Human Capital and Earnings in the Nordic Countries

Earnings differentials are commonly alleged to be notably smaller in the Nordic countries than in many other industrialized countries. Substantial differences in earnings dispersion across countries may have a number of consequences for the future role of the Nordic countries in an increasingly integrated world economy. A more compressed earnings distribution in the Nordic economies may affect both the pattern of immigration and the allocation of different production processes.