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Booming Sector and Wage Effects: An Empirical Analysis on Norwegian Data

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  • Brunstad, Rolf Jens
  • Dyrstad, Jan Morten

Abstract

Within the framework of a segmented labor model and under the assumption of market clearing wages in all submarkets, this paper analyzes demand and cost-of-living effects which a booming sector may create. The tests are based on data before and after the most intensive building-up period of the Norwegian petroleum sector. The empirical results indicate significant demand effects for the most petroleum relevant occupations and also positive cost-of-living effects in areas which are regionally close to this sector. Overall there is evidence that the Norwegian petroleum sector has caused weak manufacturing performance. Copyright 1997 by Royal Economic Society.

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  • Brunstad, Rolf Jens & Dyrstad, Jan Morten, 1997. "Booming Sector and Wage Effects: An Empirical Analysis on Norwegian Data," Oxford Economic Papers, Oxford University Press, vol. 49(1), pages 89-103, January.
    • Handle: RePEc:oup:oxecpp:v:49:y:1997:i:1:p:89-103
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    Cited by:

    1. Roberto Bande Ramudo & Melchor Fernández Fernández & Víctor Montuenga Gómez, 2011. "Wage flexibility and local labour markets: homogeneity of the wage curve in Spain," Documentos de trabajo - Analise Economica 0044, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    2. Aline Bütikofer & Antonio Dalla-Zuanna & Kjell G. Salvanes, 2023. "Natural Resources, Demand for Skills, and Schooling Choices," CESifo Working Paper Series 10543, CESifo.
    3. Mohammad R. Jahan-Parvar (bio) & Hassan Mohammadi (bio), 2011. "Oil Prices and Real Exchange Rates in Oil-Exporting Countries: A Bounds Testing Approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 45(1), pages 313-322, July-Dece.
    4. Bennett, Patrick & Ravetti, Chiara & Wong, Po Yin, 2021. "Losing in a boom: Long-term consequences of a local economic shock for female labour market outcomes," Labour Economics, Elsevier, vol. 73(C).
    5. Hassan Mohammadi & Mohammad Jahan-Parvar, 2012. "Oil prices and exchange rates in oil-exporting countries: evidence from TAR and M-TAR models," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 36(3), pages 766-779, July.
    6. Luis Felipe Céspedes C. & David Rappoport W, 2006. "El Fondo Gubernamental de Petróleo de Noruega," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 9(1), pages 71-78, April.
    7. Erling Røed Larsen, 2004. "Escaping the Resource Curse and the Dutch Disease? When and Why Norway Caught up with and Forged ahead of Its Neighbors," Discussion Papers 377, Statistics Norway, Research Department.
    8. Manfred Wiebelt & Rainer Schweickert & Clemens Breisinger & Marcus Böhme, 2011. "Oil revenues for public investment in Africa: targeting urban or rural areas?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 745-770, November.
    9. Dyrstad, Jan Morten & Johansen, Kare, 2000. "Regional Wage Responses to Unemployment and Profitabililty: Empirical Evidence from Norwegian Manufacturing Industries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(1), pages 101-117, February.
    10. Grant Mark Nülle & Graham A. Davis, 2018. "Neither Dutch nor disease?—natural resource booms in theory and empirics," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 31(1), pages 35-59, May.
    11. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    12. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    13. Jayanthakumaran, Kankesu & Bari, Mohammad Tariful, 2021. "Resource boom and non-resource firms: Mongolia 2007 and 2011," Resources Policy, Elsevier, vol. 74(C).
    14. Erling Røed Larsen, 2003. "Are Rich Countries Immune to the Resource Curse? Evidence from Norway's Management of Its Oil Riches," Discussion Papers 362, Statistics Norway, Research Department.
    15. Erling Røed Larsen, 2006. "Escaping the Resource Curse and the Dutch Disease?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 65(3), pages 605-640, July.
    16. 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.
    17. International Monetary Fund, 2005. "Norway: Selected Issues," IMF Staff Country Reports 2005/197, International Monetary Fund.
    18. Bütikofer, Aline & Dalla-Zuanna, Antonio & Salvanes, Kjell G., 2018. "Breaking the Links: Natural Resource Booms and Intergenerational Mobility," Discussion Paper Series in Economics 19/2018, Norwegian School of Economics, Department of Economics.
    19. Lubimov, I.L. (Любимов, И.Л.), 2016. "The Impact of Resource Wealth on Economic Growth: A Review of Foreign Experience and Estimates for Russia [Влияние Ресурсного Богатства На Экономический Рост: Обзор Зарубежного Опыта И Оценки Для Р," Working Papers 2044, Russian Presidential Academy of National Economy and Public Administration.
    20. Víctor M. Montuenga‐Gómez & José M. Ramos‐Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.

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