William Skoglund: Power Matters: Essays on Labor Market Power

Abstract

This thesis explores how labor market power impacts earnings and the income distribution. It examines three crucial dimensions of power in Sweden during the nineteenth and twentieth centuries: Unionization, collective bargaining, and monopsony power. The thesis comprises four empirical essays that trace both the evolution of these power resources and their effects on workers' economic outcomes during Sweden's transition to equality.

Essay I demonstrates that local unions significantly raised wages for male blue-collar workers at low-wage establishments during the Interwar period (1920s-1930s), compressing wage inequality. Interestingly, it does not find any significant effects for women, however. Essay II tracks national collective bargaining agreements in three industries across the twentieth century, revealing that minimum wage bites increased substantially after World War II, particularly during the Swedish model era. The agreements perpetuated inequalities across gender, skill, and region, though these gaps often narrowed earlier than in the broader economy. Using a regional shock to minimum wages in the 1970s, the essay shows how bargaining could impact wages positively while reducing inequalities.

Essay III, co-authored with Jakob Molinder, compares union effects in Sweden and the United States during 1940 and 1950. Despite higher unionization rates in Sweden, union wage effects were stronger in the U.S., suggesting that Swedish unions adopted more moderate bargaining strategies as they encompassed larger shares of the workforce. Essay IV, co-authored with Thor Berger, Johan Ericsson, and Jakob Molinder, documents declining labor market concentration in Swedish manufacturing from 1863 to 1939. Using census data from 1930, we show that workers in more concentrated labor markets earned substantially less, with effects concentrated among high- and medium-skilled workers whose specialized skills limited mobility.

Together, these essays establish that shifting power dynamics—stronger unions, expanded collective bargaining, and increasingly competitive labor markets—fundamentally reshaped Sweden's trajectory toward prosperity and equality.