This paper analyzes the Swedish labor market during the interwar and early postwar period within the framework of modern labor market theory. The development of unemployment during this period - according to the commonly cited source of labor union reports - represents a conundrum for research. The unemployment rate rose after the initial diverse shock of 1921 and stayed at a permanently higher level for the rest of the interwar period. This development was reversed after World War Two when the unemployment rate decreased and stayed permanently low for the rest of the postwar period until the oil price chock of the 1970s. In a first step the available sources of unemployment statistics is investigated and compared. The general conclusion is that the labor union reports overestimate the level of economy wide unemployment while being a reasonably good indicator of movements in the rate. While no assertion of absolute levels can be made the conclusion might be drawn that the equilibrium level of unemployment decreased from a higher interwar level down to a substantially lower postwar one. The paper then turns to the overarching question of the possible mainsprings of this development. The concept of the warranted wage - defined as total factor productivity growth divided by the labor share - have been used to explained the development of unemployment in the OECD from the 1970s. The theory pertains that movements in the bargained wage above or below the warranted wage will render movements in the equilibrium unemployment rate. This theoretical framework is used to analyze the Swedish inter- and early postwar experience. The warranted wage in the manufacturing sector and the whole economy is respectively estimated using historical national accounts and growth accounting. The development is then compared to the progress of real labor costs. The conclusion is that the 1920s experienced a negative growth in the warranted wage - and while real labor cost decreased during the period - wages were not cut enough in order to keep profits unchanged for firms. The opposite can be concluded for the succeeding 1930s and 1940s which instead saw a positive evolution of the warranted wage with real labor costs not growing at the same rate. The movements of real labor costs in relation to the warranted wage thus makes this factor a plausible candidate for explaining movements in the unemployment rate during the period understudy.

I uppsatsen undersöks den period då den svenska ekonomin uppnår den fulla sysselsättning som sedan blev normen för hela efterkrigstiden. I arbetet genomförs en sammanställning av fackföreningarnas arbetslöshetsstatistik som publicerats i Sociala meddelanden varje månad under perioden 1935-1948. Materialet har därefter bearbetats och utifrån förbundsredovisningen har arbetslöshetsserier skapats för sju av industrins delbranscher. Utifrån bearbetningen sammankopplas arbetslöshetsstatistiken för respektive sektor med de uppgifter om förädlingsvärden, sysselsättning och löner som publicerats i den officiella industristatistiken och som ett resultat av arbetet med svenska historiska nationalräkenskaper. Med hjälp av materialet prövas två hypoteser som kan härledas från den  Nykeynesianska teorin för arbetsmarknaden. Den första hypotesen berör sambandet mellan löneutrymme, löner och arbetslöshet. Enligt teorin måste lönerna växa i takt med den Harrod-neutrala teknologiska utvecklingen; vilken operationaliseras som totalfaktorproduktiviteten dividerad med arbetskostnadens andel av produktionsresultatet, för att arbetslöshet ska förbli oförändrad. Den andra hypotesen avser förhållandet mellan resursutnyttjande(arbetslöshet) och nominell löneinflation. Enligt teorin ska det fall då en ökning av resursutnyttjandet inte medför någon ökad löneinflation tolkas som att arbetsmarknadens funktionssätt förbättrats. De två hypoteserna prövas för respektive delbransch och för industrin som helhet. Resultatet från undersökningen är att lönerna i förhållande till löneutrymmet och sambandet mellan resursutnyttjande och löneinflation för hela industrin båda pekar i den riktning som förväntas under en period då arbetslösheten sjunker mycket kraftigt. För de respektive delbranscherna är mönstret emellertid mer varierat. Slutligen framhålls att den tidigare historieskrivningen över den svenska arbetsmarknadens utveckling bör nedtonas till förmån för en ny kronologi där den process som sammanbinder mellan- och efterkrigstiden ges större utrymme. / In the thesis the period when Sweden became a full employment society is examined. Starting off the study the union’s unemployment figures are collected from the monthly publication “Sociala meddelanden” during the period 1935-1948. Thereafter, starting from the division into different trade unions the material is processed and unemployment figures for seven industry groups are created. From the division into industry subsectors the unemployment figures are subsequently linked to the records of value added, employment and wages that has been published in the official industry statistics and as a result of the efforts to construct Swedish historical national accounts. Two hypotheses that can be derived from the New Keynesian theory of the labor market are then tested against the material. The first hypothesis pertains to the relation between the warranted wage, wages and unemployment. According to the theory wages can only grow in tandem with Harrod-neutral technological growth for unemployment to remain unaffected. The second hypotheses relates to the relationship between the level of resource utilization(unemployment) and nominal wage inflation. According to the theory the case when an upturn in the resource utilization is accompanied by unchanged nominal wages should to be interpreted as an improvement in labor market performance. The two hypotheses are tested for the seven subsectors and for the industry as a whole.    The outcome of the study is that the growth of wages in relation to the warranted wage as well as the relationship between resource utilization and nominal wage inflation point in the direction of an improvement in labor market performance for the industry as a whole during the period when full employment was achieved. For the seven subsectors however, the results are more scattered. In closing I argue that the previous historiography should be deemphasized to the benefit of a chronology that instead stretches the interconnectedness between the inter- and postwar development in order for a richer understanding of the path towards full employment in Sweden to be reached.

No description available.