Labour Unions and Wage Inequality in Norway: An Industry-Level Analysis

Abstract

Using a panel data set of Norwegian workers and industries, this thesis examines the impact of labour unions on wage inequality in Norway. The analysis employs pooled OLS and fixed effects regression models, finding that labour union density and collective bargaining are positively related to wages, particularly for low-income earners in highly unionised industries. The results show evidence of wage compression at the industrial level, low-income earners experience generally positive wage effects, high-income earners have generally negative wage effects, and median-income earners exhibit ambiguous wage effects. These findings contribute to the ongoing debate on the role of labour unions in modern economies and offer insights into the importance of strong and inclusive labour institutions in addressing wage inequality. The thesis contributes to the literature by providing a comprehensive overview of Norwegian wage setting and documenting the characteristics of labour union density and collective bargaining coverage at the industrial level.