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Explaining the change in skill structure of labour demand in Norwegian manufacturing

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In most OECD-countries, labour demand has shifted from unskilled to skilled over time. Many analyses of this phenomenon focus on either the effect of technical change, capital-skill complementarity or labour-labour substitution. We present a more general analysis of labour demand in Norwegian manufacturing, and estimate a multivariate error-correction model of the cost-shares of skilled and unskilled labour, materials and energy on industry-level panel data. The results show that skilled-biased technical change, primarily due to a positive effect on skilled labour and less due to a negative effect on unskilled labour, as well as labour-labour substitution and capital stock growth are important for explaining the shift in Norwegian labour demand. Of minor importance is also non-homotheticity.

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  • Kjersti-Gro Lindquist & Terje Skjerpen, 2000. "Explaining the change in skill structure of labour demand in Norwegian manufacturing," Discussion Papers 293, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:293
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    Cited by:

    1. Savvidou, Eleni, 2003. "The Relationship Between Skilled Labor and Technical Change," Working Paper Series 2003:27, Uppsala University, Department of Economics.
    2. Michael Rosholm & Marianne Røed & Pål Schøne, 2013. "Are new work practices and new technologies biased against immigrant workers?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 34(8), pages 995-1014, November.
    3. Roger Bjørnstad, 2000. "The Effect of Skill Mismatch on Wages in a small open Economy with Centralized Wage Setting: The Norwegian Case," Discussion Papers 270, Statistics Norway, Research Department.
    4. Pål Schøne, 2009. "New technologies, new work practices and the age structure of the workers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(3), pages 803-826, July.

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    More about this item

    Keywords

    Heterogeneous labour; Dynamic factor demand; Panel data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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