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

Kjersti-Gro Lindquist and Terje Skjerpen

Discussion Papers from Statistics Norway, Research Department

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.

Keywords: Heterogeneous labour; Dynamic factor demand; Panel data (search for similar items in EconPapers)
JEL-codes: C33 E23 (search for similar items in EconPapers)
Date: 2000-12
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ssb:dispap:293

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