Stable wages in unionized economy adapt to regional unemployment changes.
The study looked at how wages change when unemployment rates vary in Sweden. In a country where unions cover most workers and wages have been stable for 15 years, researchers found that wages can still adjust when unemployment levels shift. Employees at higher risk of losing their jobs and new hires coming from unemployment see bigger wage changes. Taking into account the types of workers in a region is crucial for understanding how wages respond to unemployment changes.