AN EMPIRICAL-ANALYSIS OF WAGE DISPERSION AND EFFICIENCY WAGES

The main purpose of this study is to examine inter-industry wage differentials in Sweden. After controlling for individual and job characteristics, the results indicate that these differentials are substantial. The ranking of the differentials was stable over time, while the dispersion of wage premiums fell by 50 per cent during the period 1968-81 - a period of strong efforts to reduce wage dispersion in Sweden. The relation between industry wage premiums and a number of industry characteristics is also examined, along with new evidence which is in line with the shirking model hypothesis on the relation between wages and worker control.