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Jobs and Growth in Finland: Industry-level Evidence from the 1990s

Author

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  • Pekka Sauramo

Abstract

The nature of co-movement between total output and employment during the 1990s indicates that the relationship between employment growth and economic activity has been peculiar in Finland. This has been reflected, for example, in the developments of aggregate labour productivity. In particular, the years from 1992 to 1994 were exceptional. During that period productivity growth was very rapid, and, what is important, the trend of aggregate labour productivity shifted upwards. By only analysing the relationship between total output and employment it is impossible to say what happened during the period between 1992 and 1994. In this paper the relationship is analysed by utilizing industry-level data. The analysis shows that the rapid growth in aggregate productivity and the upward shift in the productivity trend mainly reflect similar developments in manufacturing, particularly in the metal industry. Even though the investigation is based on the use of industry-level data, it is still aggregative, which makes the interpretation of the results less clearcut. The existing studies which are based on the use of micro-level (e.g. plant-level) data support the interpretation which emphasizes the role of business restructuring and labour reallocation within manufacturing as the causes of rapid productivity growth and the upward shift in the trend productivity. The analysis is based on the estimation of simple structural VAR models.

Suggested Citation

  • Pekka Sauramo, 1999. "Jobs and Growth in Finland: Industry-level Evidence from the 1990s," Working Papers 160, Työn ja talouden tutkimus LABORE, Labour Institute for Economic Research LABORE.
    • Handle: RePEc:pst:wpaper:160
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    References listed on IDEAS

    as
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    More about this item

    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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