Wage restraint in Scandinavia: during the postwar period or the neoliberal age?

An influential interpretation of the strong growth performance in Western Europe in the 1950s and 1960s stresses the importance of wage restraint, trade unions holding back wages to increase investments. This article questions that interpretation, using a wage regression approach with eighty-five to ninety-six years of data on wages, inflation, unemployment, productivity, and other variables in Denmark, Norway, and Sweden, focusing on the post-1950 period. It is shown that wages in fact increased faster than productivity in Sweden in the 1950s and 1960s and in Denmark and Norway in the 1960s. On the other hand, especially Denmark and Sweden saw wage restraint in the 1980s and 1990s. Overall the results of the article support a power-oriented interpretation of wage bargaining rather than the conventional postwar wage restraint story. In explaining the differences between the countries, the article discusses economic structure, post–World War II situation, and trade union ideology.