Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1026: Global Engagement and the Occupational Structure of Firms

Fredrik Heyman (), Fredrik Sjöholm (), Carl Davidson (), Steven Matusz () and Susan Chun Zhu ()
Additional contact information
Fredrik Heyman: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Fredrik Sjöholm: Lund University
Carl Davidson: Michigan State University
Steven Matusz: Michigan State University
Susan Chun Zhu: Michigan State University

Abstract: Global engagement can impact firm organization and the occupations firms need. We use a simple task-based model of the firm’s choice of occupational inputs to examine how that choice varies with global engagement. We reveal a robust and causal relationship between global engagement and the skill mix of occupations within firms, using Swedish matched employer-employee data that link firms and the labor force for 1997-2005. Taking an instrumental variable approach, we find that increased export shares (driven by higher world import demand) skew the labor mix more toward high-skill occupations. Our results suggest that global engagement may require firms to employ more skilled labor to undertake complex tasks embodied in international businesses, which have further implications for the demand for specific occupational skills and overall wage dispersion.

Keywords: Occupational structure; Globalization; Multinational Enterprises; Exporters

JEL-codes: F10; F20

40 pages, First version: May 27, 2014. Revised: August 29, 2017.

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