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Labour Substitution in Denmark

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  • Risager, Ole

Abstract

This paper analyzes Danish firms' demand for skilled and unskilled labor. The main focus is on the degree of long-run substitutability and the paper, therefore, applies the cointegration method. The paper finds that there is a high degree of substitutability between the two types of labor. Moreover, price increases on imported raw materials lead to a fall in the demand for unskilled labor relative to the demand for skilled labor. The decline in wage differentials and the adverse OPEC shocks in the 1970s, therefore, explain why unskilled workers have had a more unfavorable employment performance than skilled workers. Copyright 1993 by Blackwell Publishing Ltd

Suggested Citation

  • Risager, Ole, 1993. "Labour Substitution in Denmark," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(1), pages 123-135, February.
    • Handle: RePEc:bla:obuest:v:55:y:1993:i:1:p:123-35
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    Cited by:

    1. Laffargue, Jean-Pierre, 1995. "Charges sociales, qualifications et emploi. étude à l'aide d'un modèle d'équilibre général calculable de l'économie française," CEPREMAP Working Papers (Couverture Orange) 9502, CEPREMAP.
    2. Pål Boug, 1999. "The Demand for Labour and the Lucas Critique. Evidence from Norwegian Manufacturing," Discussion Papers 256, Statistics Norway, Research Department.
    3. Skaksen, Jan Rose & Sorensen, Anders, 2002. "Skill Upgrading and Rigid Relative Wages: The Case of Danish Manufacturing," IZA Discussion Papers 664, Institute of Labor Economics (IZA).
    4. Blomgren-Hansen, Niels, 2012. "Optimum organization of the labor market in a small open economy," Labour Economics, Elsevier, vol. 19(2), pages 222-231.
    5. de la Croix, David, 1994. "Wage Interdependence through Decentralized Bargaining," Journal of Economic Surveys, Wiley Blackwell, vol. 8(4), pages 371-403, December.

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