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Job Creation, Job Destruction and Plant Turnover in Norwegian Manufacturing

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Abstract

The labour market in Norway, as in other Scandinavian countries, is often claimed to be overregulated and incapable of adjustment to changes in job opportunities. The results presented in this paper suggest to the contrary that in terms of job creation and job reallocation between plants, the manufacturing sector in Norway is surprisingly flexible, and similar to the manufacturing sector in other OECD countries such as the U.S. We show that 8.4 percent of the manufacturing jobs are eliminated annually, while new jobs constitute 7.1 percent of manufacturing employment, in an average year. Even in a serious recession year, a considerable number of new jobs are created. The paper also examines job creation in small versus large plants (and firms), as well as young versus old plants. The results provide support to selection models a la Jovanovic (1982), while vintage-capital models seem to be largely irrelevant as models of plant heterogeneity.

Suggested Citation

  • Tor Jakob Klette & Astrid Mathiassen, 1995. "Job Creation, Job Destruction and Plant Turnover in Norwegian Manufacturing," Discussion Papers 136, Statistics Norway, Research Department.
  • Handle: RePEc:ssb:dispap:136
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    Cited by:

    1. David B. Audretsch & Max Keilbach, 2006. "Entrepreneurship, Growth and Restructuring," Papers on Entrepreneurship, Growth and Public Policy 2006-13, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    2. Aga,Gemechu A. & Francis,David C. & Rodriguez Meza,Jorge Luis, 2015. "SMEs, age, and jobs : a review of the literature, metrics, and evidence," Policy Research Working Paper Series 7493, The World Bank.
    3. Ibrahim Mike Okumu & Patricia Naluwooza & Edward Bbaale, 2022. "Firm Dynamics, Job Creation and Job Destruction in Africa: Is the Quality of Institutional Environment Relevant?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2970-3004, December.
    4. Moene, Karl Ove & Wallerstein, Michael, 1997. "Pay Inequality," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 403-430, July.
    5. Erling Holmøy & Torbjørn Hægeland, 1997. "Aggregate Productivity Effects of Technology Shocks in a Model of Heterogeneous Firms: The Importance of Equilibrium Adjustments," Discussion Papers 198, Statistics Norway, Research Department.
    6. Massimo FLORIO & Emanuele OZZIMO, 2006. "Innovation strategies for SMEs and clusters: the challenges of a globalised Europe," Departmental Working Papers 2006-16, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    7. Audretsch, David & Sanders, Mark, 2007. "Globalization and the Rise of the Entrepreneurial Economy," CEPR Discussion Papers 6247, C.E.P.R. Discussion Papers.
    8. Kjell G. Salvanes & Svein Erik Førre, 2001. "Job Creation, Heterogeneous Workers and Technical Change: Matched Worker/Plant Data Evidence from Norway," Discussion Papers 304, Statistics Norway, Research Department.
    9. Ligia Alba Melo & Carlos Andrés Ballesteros, 2013. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 15(28), pages 281-311, January-J.
    10. F. Voulgaris & G. Agiomirgianakis & T. Papadogonas, 2015. "Job creation and job destruction in economic crisis at firm level: the case of Greek manufacturing sectors," International Economics and Economic Policy, Springer, vol. 12(1), pages 21-39, March.
    11. Hilde Christiane Bjørnland, 1996. "Sources of Business Cycles in Energy Producing Economies - The case of Norway and United Kingdom," Discussion Papers 179, Statistics Norway, Research Department.
    12. Delmar, Frédéric & McKelvie, Alexander & Wennberg, Karl, 2013. "Untangling the relationships among growth, profitability and survival in new firms," Ratio Working Papers 205, The Ratio Institute.
    13. Carlos Carreira & Paulino Teixeira, 2008. "Internal and external restructuring over the cycle: a firm-based analysis of gross flows and productivity growth in Portugal," Journal of Productivity Analysis, Springer, vol. 29(3), pages 211-220, June.
    14. Erling Holmøy, 2003. "Aggregate Industry Behaviour in a Monopolistic Competition Model with Heterogeneous Firms," Discussion Papers 352, Statistics Norway, Research Department.
    15. Ligia Alba Melo B & Carlos Andrés Ballesteros R, 2012. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Borradores de Economia 9407, Banco de la Republica.
    16. Erling Holmøy & Torbjørn Hægeland, 2000. "Aggregate Productivity and Heterogeneous Firms," Discussion Papers 266, Statistics Norway, Research Department.
    17. Faehn, Taran & Holmoy, Erling, 2003. "Trade liberalisation and effects on pollutive emissions to air and deposits of solid waste. A general equilibrium assessment for Norway," Economic Modelling, Elsevier, vol. 20(4), pages 703-727, July.
    18. Taran Fæhn & Erling Holmøy, 2001. "Trade Liberalisation and Effects on Pollutive Emissions and Waste A General Equilibrium Assessment for Norway," Discussion Papers 298, Statistics Norway, Research Department.
    19. Taran Fæhn & Erling Holmøy, 1999. "Welfare Effects of Trade Liberalisation in Distorted Economies A Dynamic General Equilibrium Assessment for Norway," Discussion Papers 251, Statistics Norway, Research Department.
    20. Richard Duhautois, 2002. "Les réallocations d'emplois en France sont-elles en phase avec le cycle ?," Économie et Statistique, Programme National Persée, vol. 351(1), pages 87-103.
    21. repec:eee:labchp:v:3:y:1999:i:pb:p:2711-2805 is not listed on IDEAS
    22. Stephen Esaku, 2022. "Which firms drive employment growth in Sub-Saharan Africa? Evidence from Kenya," Small Business Economics, Springer, vol. 59(1), pages 383-396, June.
    23. Carlos Carreira & Paulino Teixeira, 2010. "Does Schumpeterian Creative Destruction Lead to Higher Productivity? The effects of firms’ entry," GEMF Working Papers 2010-20, GEMF, Faculty of Economics, University of Coimbra.
    24. Jana Kolaøíková & Ondøej Dvouletý & Petr Kolaøík, 2018. "Economic performance of the NUTS III Regions in the Czech Republic in the context of entrepreneurship subsidies from the EU Structural Funds," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 129-153.
    25. Camacho-Cabiscol, Josep-Maria & Baró Llinàs, Joan & Alemany Leira, Ramon, 2000. "Job Flows In Catalonia," ERSA conference papers ersa00p456, European Regional Science Association.

    More about this item

    Keywords

    Job creation; job destruction; entry and exit.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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