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

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Kjersti-Gro Lindquist and Terje Skjerpen () (Statistics Norway)

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Abstract

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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Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 293.

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Handle: RePEc:ssb:dispap:293

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Related research
Keywords: Heterogeneous labour; Dynamic factor demand; Panel data;

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Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Toevs, Alden L., 1982. "Approximate variance formulas for the elasticities of substitution obtained from translog cost functions," Economics Letters, Elsevier, vol. 10(1-2), pages 107-113. [Downloadable!] (restricted)
  2. Card, David & Kramarz, Francis & Lemieux, Thomas, 1998. "Changes in the Relative Structure of Wages and Employment: A Comparison of Canada, France and the United States," CEPR Discussion Papers 2008, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. E.K. Berndt & B.H. Hall & R.E. Hall, 1974. "Estimation and Inference in Nonlinear Structural Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 4, pages 103-116 National Bureau of Economic Research, Inc. [Downloadable!]
  4. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November. [Downloadable!] (restricted)
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  5. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February. [Downloadable!] (restricted)
  6. Anderson, G J & Blundell, R W, 1982. "Estimation and Hypothesis Testing in Dynamic Singular Equation Systems," Econometrica, Econometric Society, vol. 50(6), pages 1559-71, November. [Downloadable!] (restricted)
  7. Haegeland, T. & Klette, T.J. & Salvanes, K.G., 1999. "Declining Returns to Education in NOrway? Comparing Estimates Across Cohorts, Sectors and Over Time," Papers 14/99, Norwegian School of Economics and Business Administration-.
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  8. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  9. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December. [Downloadable!] (restricted)
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  10. Berndt, Ernst R & Savin, N Eugene, 1975. "Estimation and Hypothesis Testing in Singular Equation Systems with Autoregressive Disturbances," Econometrica, Econometric Society, vol. 43(5-6), pages 937-57, Sept.-Nov. [Downloadable!] (restricted)
  11. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November. [Downloadable!] (restricted)
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  12. Rolf Aaberge, Anders Björklund, Markus Jäntti, Peder J. Pedersen, Nina Smith and Tom Wennemo, 1997. "Unemployment Shocks and Income Distribution How Did the Nordic Countries Fare During their Crises?," Discussion Papers 201, Research Department of Statistics Norway. [Downloadable!]
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  13. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June. [Downloadable!] (restricted)
  14. Salvanes, K.G. & Tjotta, S., 1998. "A NOte on the Importance of Testing for Regularities for Estimated Flexible Functional Forms," Norway; Department of Economics, University of Bergen 177, Department of Economics, University of Bergen.
  15. Mahmud, S F & Robb, A L & Scarth, William M, 1987. "On Estimating Dynamic Factor Demands," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 2(1), pages 69-75, January. [Downloadable!] (restricted)
  16. Eli Berman & John Bound & Stephen Machin, 1998. "Implications Of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1245-1279, November. [Downloadable!] (restricted)
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  17. Salvanes, K.G. & Forre, S.E., 1999. "Job Destruction, Heterogeneous Workers, Trade and Technical Change: Matched Worker/Plant Data Evidence from Norway," Papers 15/99, Norwegian School of Economics and Business Administration-.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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, Research Department of Statistics Norway. [Downloadable!]
  2. Michael Rosholm & Marianne Røed & Pål Schøne, 2006. "Are New Work Practices and New Technologies Biased against Immigrant Workers?," IZA Discussion Papers 2135, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Savvidou, Eleni, 2003. "The Relationship Between Skilled Labor and Technical Change," Working Paper Series 2003:27, Uppsala University, Department of Economics. [Downloadable!]
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