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The Loss of Production Work: Evidence from Quasi-Experimental Identification of Labour Demand Functions

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  • Elias Einiö

Abstract

This paper examines changes in the structure of labour demand in plant-level panel data. I exploit variation in wages across local labour markets induced by the collapse of Finland's Soviet-dependent industry in the early 1990s to identify a labour demand model for plants producing for non-Soviet markets, which were not directly affected by the Soviet shock. I find a labour demand shift against workers in production occupations which accelerates in the 2000s, when industry patterns begin to diverge. Industry heterogeneity suggests that variation in industry structure may partly explain the differential development of wages and employment across countries.

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  • Elias Einiö, 2016. "The Loss of Production Work: Evidence from Quasi-Experimental Identification of Labour Demand Functions," CEP Discussion Papers dp1451, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1451
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    More about this item

    Keywords

    labour demand function; occupation; offshoring; manufacturing; panel data; production work; technical change;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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