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Labour Markets, Gender and Institutional Change

Essays in Honour of Günther Schmid

Edited by Hugh Mosley and Jacqueline O’Reilly

The original essays in this book have been written by a number of leading international experts in the field of labour market studies to honour the intellectual contribution and lifetime achievement of Günther Schmid.
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Chapter 3: Can Sweden’s ‘Rehn–Meidner’ model be put back on its feet?

Lars Behrenz, Lennart Delander and Harald Niklasson


Lars Behrenz, Lennart Delander and Harald Niklasson1 Having passed the threshold of the twenty-first century, many societies all over the world now have to face an ever more evident and unpleasant phenomenon observed for several decades: escalating inequality. The development towards increasingly uneven distribution of wage earnings, disposable income and wealth in advanced economies is widely regarded as the consequence of the continuing and accelerating internationalization of product and capital markets in combination with the introduction of new technologies and new organizational forms. The processes of internationalization have meant, among many other things, enhanced ways to site low-skill-intensive production for the world market in low-wage countries that have abundant unskilled labour. In the advanced economies the consequent decrease in the relative demand for low-skilled labour and the corresponding rise in the relative demand for skilled labour have been reinforced by the emergence of new technologies that are more skill-intensive than those of the past. From this perspective, one should not be altogether surprised by what is being observed in most OECD countries: increasing wage and income dispersions and increasing unemployment among insufficiently educated or, for other reasons, ‘low-productive’ individuals. According to one common interpretation, the impact of wage dispersion has been dominant in some countries, especially in the United States and Great Britain, whereas the impact of unemployment has been more prominent in, say, the Nordic countries and many of the countries on the European continent. Atkinson (2000, p. 4) referred to this widely accepted view as ‘the...

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