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Resource Boom, Wages and Unemployment: Theory and Evidence from the Norwegian Petroleum Experience


  • Dyrstad, Jan Morten


The effects of Norwegian petroleum activities on nominal wages and the rate of unemployment are analyzed. The theoretical model is based on standard theory of segmented labor markets. Increased nominal wages in the petroleum sector will unambiguously increase the wage level and the rate of unemployment. Increased petroleum employment will, under realistic assumptions, also raise the wage level. The effect on the rate of unemployment in this case is ambiguous. The empirical model is embedded in reduced forms of the theoretical model and the estimated parameters are consistent with the theoretical results. Copyright 1987 by The editors of the Scandinavian Journal of Economics.

Suggested Citation

  • Dyrstad, Jan Morten, 1987. " Resource Boom, Wages and Unemployment: Theory and Evidence from the Norwegian Petroleum Experience," Scandinavian Journal of Economics, Wiley Blackwell, vol. 89(2), pages 125-143.
  • Handle: RePEc:bla:scandj:v:89:y:1987:i:2:p:125-43

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    References listed on IDEAS

    1. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    2. Morten O. Ravn & Fabio Canova, 1997. "Crossing the Rio Grande: Migrations, business cycles and the welfare state," Economics Working Papers 248, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 1997.
    3. Persson, Torsten & Tabellini, Guido, 1999. "The size and scope of government:: Comparative politics with rational politicians," European Economic Review, Elsevier, vol. 43(4-6), pages 699-735, April.
    4. Storesletten, Kjetil & Telmer, Chris I. & Yaron, Amir, 1999. "The risk-sharing implications of alternative social security arrangements," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 213-259, June.
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    Cited by:

    1. Jan Morten Dyrstad, 2015. "Resource curse avoidance: Governmental intervention and wage formation in the Norwegian petroleum sector," Working Paper Series 16715, Department of Economics, Norwegian University of Science and Technology.

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