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Technology and Skill Upgrading: Results From Linked Worker-Plant Data for Finnish Manufacturing

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  • Jari Vainiomäki

    (School of Management, University of Tampere)

Abstract

In this paper we use both the standard Census of Manufacturing data and new linked information on worker characteristics for the Finnish manufacturing plants to examine the skilled/unskilled relative demand and its correlation with technology and demand factors. The linked worker-plant data are produced by matching workers in the Employment Statistics database to the plants in the Census of Manufacturing. The employment statistics database is utilised to procure an alternative measure for the skill composition of plants’ work force based on education and to obtain average wages for these educational skill groups. We are therefore able to analyse skill upgrading and relative wages using the standard non-production/production breakdown as well as a skill-grouping based on the workers’ education. We apply decomposition techniques and regression analysis to study possible explanations for the changes in the share of skilled workers. In order to analyse the effects of technology on skill demand we introduce plant level technology indicators from the R&D Survey and a Manufacturing Technology Survey. Our main findings are that skill upgrading is mostly the results of increasing shares of more skilled workers within plants, but also that plant entry and exit effects have become more important. This within-plant skill upgrading correlates positively with the plant level R&D intensity which provides evidence for skill-biased technological change. We also find that the effect of increased demand for skilled workers has mainly increased their employment rather than their wages.

Suggested Citation

  • Jari Vainiomäki, 2013. "Technology and Skill Upgrading: Results From Linked Worker-Plant Data for Finnish Manufacturing," Working Papers 1387, Tampere University, Faculty of Management and Business, Economics.
    • Handle: RePEc:tam:wpaper:1387
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    File URL: http://urn.fi/URN:ISBN:978-951-44-9083-5
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    References listed on IDEAS

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    1. John Schmitt, 1993. "The Changing Structure of Male Earnings in Britain," CEP Discussion Papers dp0122, Centre for Economic Performance, LSE.
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    Cited by:

    1. Michel Dumont & Glenn Rayp & Marijn Verschelde & Bruno Merlevede, 2016. "The contribution of start-ups and young firms to industry-level efficiency growth," Applied Economics, Taylor & Francis Journals, vol. 48(59), pages 5786-5801, December.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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