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Has privatization improve the wage bargain of welfare workers?
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.ORCID iD: 0000-0002-5560-1124
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Introducing private firms to a labor market previously dominated by a single public employer should improve the wage bargain of workers; by breaking up a public monopsonist, demand-side competition for scarce labor inputs should lift wages closer to competitive rates. Here, I study how the wages and incomes of blue collar care workers and white collar nurses in Sweden are impacted when more employers are introduced as a result of welfare privatization, employing a wage-concentration model and a difference-in-difference event study model of privatization events, using detailed employer-employee matched administrative data. Employer concentration has a relatively strong negative effect on the wages and incomes of nurses, but a much smaller effect on care workers. Privatization events have no significant impact to nurses incomes, while care workers' incomes decrease by 11 to 12 percent. The results suggest heterogeneous effects from privatization based on worker skills; "lower skill" blue collar care workers have been adversely affected by privatization, whereas higher skill white collar nurses have not. The differences are likely rooted in sectoral collective bargaining agreement provisions.

National Category
Economics
Identifiers
URN: urn:nbn:se:bth-26206OAI: oai:DiVA.org:bth-26206DiVA, id: diva2:1858229
Available from: 2024-05-16 Created: 2024-05-16 Last updated: 2024-05-16Bibliographically approved
In thesis
1. Essays on exit, voice, and technology: Industrial relations in modern Swedish labor markets
Open this publication in new window or tab >>Essays on exit, voice, and technology: Industrial relations in modern Swedish labor markets
2024 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation explores current topics of the Swedish industrial relations system and how labor market institutions affects the behavior and outcomes of firms and workers, using qualitative and quantitative methods to explore the role of bargaining power in modern labor markets.

As the dissertation is composed of four independent papers, it begins with a customary ”kappa”, which conceptually binds together and summarizes the four papers. The kappa provides the reader with a primer to the Swedish industrial relations system, presents the exit-voice framework as a fruitful model to study sources of bargaining power, discusses how technologies are shaped by bargaining power, and concludes with a discussion of how the Swedish IR system is particularly suited to address current labor market challenges within the so-called Rehn-Meidner framework. The kappa is concluded by summary of each paper.

Paper 1 explores the strategies and interactions of gig platforms with Swedish and Danish labor market institutions, including unions, government agencies, and legislators. We discuss platform rationales and strategies that lead to evasion or integration in the industrial relations system via the collective bargaining model. Chapter 2 is a case study on how technologies can be shaped to produce positive-sum outcomes in the rapidly advancing Swedish mining industry. The study considers how power resources within the industrial relations system’s web of rules inform and enforces constructive dialogue between unions and employers in technological bargaining. Paper 3 explores wages and the competitiveness of labor markets, considering impacts to the wage bargain from individual bargaining power, derived through labor demand in local labor markets, or by collective bargaining power through Sweden’s centralized model of wage formation. We find comparatively modest negative effects from employer concentration in Sweden, but that blue collar wages are positively impacted by increased employer concentration. The paper validates popular wage-concentration models, showing an ability to separate individual and collective bargaining power effects on wages. Paper 4 compares how lower and higher skill healthcare and welfare workers are impacted by privatization, by analyzing wage and income effects from reductions in employer concentration, and by treating privatization as a domestic outsourcing event. The results find a significant negative impact to incomes for (blue collar) care workers, but no significant effects to (white collar) nurses.

Place, publisher, year, edition, pages
Karlskrona: Blekinge Tekniska Högskola, 2024. p. 208
Series
Blekinge Institute of Technology Doctoral Dissertation Series, ISSN 1653-2090 ; 08
Keywords
Industrial Relations, Labor Economics, Structural Change
National Category
Economics
Research subject
Industrial Economics a nd Managemen
Identifiers
urn:nbn:se:bth-26146 (URN)978-91-7295-481-6 (ISBN)
Public defence
2024-06-12, J1630, Campus Karslkrona, Karlskrona, 13:15 (English)
Opponent
Supervisors
Available from: 2024-04-25 Created: 2024-04-25 Last updated: 2024-05-23Bibliographically approved

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Söderqvist, Carl Fredrik

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