Peder J. Pedersen

Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States

This paper compares income inequality and income mobility in the Scandinavian countries and the United States during 1980–90. The results suggest that inequality is greater in the United States than in the Scandinavian countries and that this inequality ranking of countries remains unchanged when the accounting period of income is extended from one to eleven years. The pattern of mobility turns out to be remarkably similar, in the sense that the proportionate reduction in inequality from extending the accounting period of income is much the same. But we do find evidence of greater dispersion of first differences of relative earnings and income in the United States. Relative income changes are associated with changes in labor market and marital status in all four countries, but the magnitude of such changes are largest in the United States.

Unemployment Shocks and Income Distribution: How did the Nordic Countries Fare during their Crises?*

We study the inequality of disposable income in Denmark, Finland, Norway and Sweden during the late 1980s and early 1990s when unemployment rose dramatically in all four countries. A standard measure of inequality - the Gini coefficient - was surprisingly stable in all countries during this period. By decomposing the Gini into income components, we test hypotheses about the reasons for this stable income distribution. Our most straightforward hypothesis, that rising unemployment benefits counteracted the impact of more unequally distributed earnings, receives only limited support. More complex mechanisms seem to have been at work.

At the Lower End of the Table: Determinants of Poverty among Immigrants to Denmark and Sweden

In this paper we study determinants of relative poverty among immigrants and natives in Denmark and Sweden during the 1980s and 1990s. Denmark and Sweden share the same properties in a range of labour-market and welfare-state characteristics. At the same time, they differ very much in cyclical profiles and immigration experiences during recent decades. Both countries have followed the same principles regarding immigration policy, i.e. immigration from low-income countries has been restricted to tied movers and refugees. We use 60 percent of the median in the distribution of equivalent disposable income as the poverty line. Data comes from two large panels based on administrative data. We find that immigrants have higher poverty rates than natives in both countries and that this difference has clearly increased in both countries. The paper reports results based on running probability models of poverty incidence. Explanatory variables include years since immigration, demographic characteristics and country of origin. We conclude that a significant part of the difference in aggregate immigrant poverty rates reflects differences in composition by country of origin and differences in the structure of benefits to families with children.

Pathways to early retirement in Denmark, 1984‐2000

This paper describes and analyses the pathways to early retirement in Denmark. The analyses are based on a 10 per cent panel sample of the population 45-66 years old followed from 1984 onwards. We use a multinomial logit approach to analyse the characteristics of individuals that retire through each pathway compared to those remaining in the labour force. The transition from work to retirement is complex and far from the conventional idea of exit typically occurring from a job at the official pension age. Eight pathways from work to an early retirement program are identified. One group of pathways is transitions directly from employment corresponding to 75 per cent of all transitions in the sample period. The great majority of these transitions occur to an early retirement program. A second group consists of pathways dominated by unemployment insurance benefits (UIB) covering 20 per cent. The remaining 5 per cent of the transitions occur through pathways dominated by benefit programs reflecting a low attachment to the labour force in the period prior to retirement. Overall, availability and/or generosity of retirement programs are important for early retirement through the employment and UIB dominated pathways. For early retirement through other pathways, however, personal characteristics seem to be at least as important as retirement programs.

Long-run international trends in aggregate unionization

Abstract The major trends in aggregate unionization in the OECD-countries are analyzed for the whole period for which data are available. The analysis of the big country differences in both the level and the trend of unionization are related to cyclical as well as structural factors in the labour market and to the political and institutional developments. Three different national experiences can be clearly identified in the post-war years, i.e., a group of countries with decreasing unionization, a group with constant, and a group with increasing unionization. The difference between decreasing/constant and increasing unionization seems to be related to the institutional organization of unemployment insurance.

Poverty and low income in the Nordic countries

Low incomes in Denmark, 1980-1995 income poverty in Finland 1971 to 1995 poverty in Iceland extent, level and distribution of low income in Norway, 1979-1995 poverty in Sweden changes 1975-1995, profile and dynamics conclusions.

To work, to retire – or both? Labor market activity after 60

The Danish labor market follows the trend in other countries of increasing labor force participation in the 60+ group. In Denmark, this increase has – until now – been most pronounced among 60-64-year-olds and among women. Increasing labor force participation is related to both a decline in the take-up of early retirement among 60-64-year-olds, an increase in the average age of entry to a retirement program, and an increase in the propensity of working after entering a retirement program. Significant impact on work after 60 is found from education, gender, marital status, home ownership, aggregate unemployment before retirement, age and education.JEL CodesH55, J14, J26

International Migration and Migration Policy in Denmark

This paper gives an introduction to the persistent problems regarding labour market integration of Non-Western immigrants and refugees in Denmark. We describe changes in the flow of immigrants to Denmark and the derived changes in the composition of the stock of immigrants and descendants on national origin. Next, the paper describes Danish immigration policy from the guest worker stop in the 1970s and until the recent situation. The shift in the composition of immigrants has contributed to a problematic situation regarding labour market integration, characterized by low participation and high unemployment among non-OECD immigrants. We emphasize problems on the demand side of the labour market, i.e. a high minimum wage and discrimination to some extent, and on the supply side due to weak or counterproductive financial incentives

Union Growth in Denmark, 1911-39

The years up to 1939 constitute the penetration phase of unions in Denmark. Models of the Ashenfelter-Pencavel or Bain-Elsheikh type are not able to explain the development in the degree of unionization. A model with special emphasis on the narrow relationship between union membership and unemployment insurance in Denmark gives a much more satisfactory explanation. The benefit wage ratio and real payments to unemployment insurance contribute significantly in explaining union growth. In addition the rate of inflation has a significantly positive effect.

Immigrant Child Poverty – The Achilles Heel of the Scandinavian Welfare State

Abstract Immigrant and native child poverty in Denmark, Norway, and Sweden 1993–2001 is studied using large sets of panel data. While native children face yearly poverty risks of less than 10 percent in all three countries and for all years studied the increasing proportion of immigrant children with an origin in middle- and low-income countries have poverty risks that vary from 38 up to as much as 58 percent. At the end of the observation period, one third of the poor children in Norway and as high as about a half in Denmark and in Sweden are of immigrant origin. The strong overrepresentation of immigrant children from low- and middle-income countries when measured in yearly data is also found when applying a longer accounting period for poverty measurement. We find that child poverty rates are generally high shortly after arrival to the new country and typically decrease with years since immigration. Multivariate analysis shows that parents years since immigration and education affect risks of the number of periods in persistent poverty. While a native child is very unlikely to spend nine years in poverty, the corresponding risk for a child to a newly arrived immigrant was found to be far from negligible. Much of the pattern is similar across the three countries but there are also some notable differences.