The class-origin wage gap: heterogeneity in education and variations across market segments^†

Abstract

This paper uses unique population-level matched employer–employee data on monthly wages to analyse class-origin wage gaps in the Swedish labour market. Education is the primary mediator of class origin advantages in the labour market, but mobility research often only considers the vertical dimension of education. When one uses an unusually detailed measure of education in a horizontal dimension, the wage gap between individuals of advantaged and disadvantaged class origin is found to be substantial (4–5 per cent), yet considerably smaller than when measures are used which only control for level of education and field of study. This is also the case for models with class or occupation as outcome. The class-origin wage gap varies considerably across labour market segments, such as those defined by educational levels, fields of education, industries and occupations in both seemingly unsystematic and conspicuous ways. The gap is small in the public sector, suggesting that bureaucracy may act as a leveller.