First Author:   Mahmood Arai Department of Economics, Stockholm University ma@ne.su.se   106 91 Stockholm Stockholm, Sweden   +46 8 162149(Phone) +46 8 162149(Fax) http://people.su.se/~ma/ Second Author: Fredrik Heyman FIEF (Trade Union Institute for Economic Research) fredrik.heyman@fief.se   Wallingatan 38 Stockholm, 111 24, Sweden   +46 8 6969922(Phone) +46 8 20 73 13(Fax)