Essays on the functioning of the Swedish labour market

Sammanfattning: The subject of this thesis is the functioning of the Swedish Labour Market. In four essays, different aspects of this general question are examined. Two of the essays are related to youth labour market problems.The first paper examines the hypothesis of the wage curve, which is defined as a negative and non-linear relationship between wages and regional unemployment rates. By using micro data covering the period 1968-1991, this paper gives evidence of a Swedish wage curve, but for unskilled blue-collar workers only. This is contrary to the results reported by international research, where the main finding is the existence of wage curves for most worker categories. One explanation of the divergent result for Sweden may be the low levels of unemployment that prevailed in Sweden during the period examined, which made the risk of unemployment negligible for the category of skilled workers.The purpose of the second paper is to examine the reallocation processes taking place on the Swedish labour market. In the analysis I distinguish between job mobility within and between industries. Work history data serve as a representation of the Swedish labour force and its job mobility pattern. The period examined is 1974-1991. The main finding is that industry-specific experience decreases the propensity for job mobility to other industries, whereas the converse effect emerges for job mobility within the industry. Further, individual unemployment events significantly increase job mobility in general, but unemployed workers with industry-specific experience are relatively more tied to a specific industry. Finally, as predicted by efficiency wage models, high-wage industries exhibit lower turnover rates.The third paper addresses the question whether unstable youth labour market behaviour has effects on future employment stability, measured as the risk of becoming unemployed. The analysis is carried out by estimating hazard models using Swedish work history data covering the period 1971-1991. The main finding is that there are long-run persistence effects of unemployment occurrences taking place during initial years on the labour market. The effects are particularly pronounced for females. Moreover, for males, increasing age lowers the risk of unemployment, whereas for females, age does not influence the risk of unemployment during the adult working life. The fourth paper analyses the implications of changing educational institutions and rising skill requirements for the patterns of labour market entry in Sweden. The main finding is that the general upgrading of skills levels does not apply to jobs held by the young workforce. This is partly compensated by a minor rise in mobility from unskilled to skilled jobs, but trying out several jobs has a negative effect on upward mobility. Finally, the positive impact on upward mobility of shorter programmes in the old educational system has vanished after the expansion and reorganization of secondary education.