Scandinavian Working Papers in Economics

Working Paper Series,
Trade Union Institute for Economic Research

No 152: Relative Demand for Skills in Swedish Manufacturing: Technology or Trade?

Pär Hansson
Additional contact information
Pär Hansson: Trade Union Institute for Economic Research, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden

Abstract: The rate of change in the share of skilled labor has increased steadily over the past 35 years in Swedish manufacturing. A closer inspection of the period after 1970 indicates that while relative supply changes of skilled labor seem to have been the main driving force behind the growing skill shares in manufacturing industries over the period 1970-85, an acceleration in the relative demand for skills appears to have propelled higher skill shares during the late 1980s and in the beginning of the 1990s. Consistent with such a development is the finding of an increasing degree of complementarity between knowledge capital and skilled labor and that Swedish manufacturing firms, in recent years, have invested heavily in R&D. There is also some support for the belief that intensified competition from the South has increased the relative demand for skilled labor. However, the impact appears to be small and concentrated to the 1970s and the beginning of the 1980s.

Keywords: Skill upgrading; Knowledge capital; Import competition; Outsourcing

JEL-codes: F14; J31; O33

36 pages, April 29, 1999

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