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Global Engagement and the Occupational Structure of Firms

Davidson, Carl; Heyman, Fredrik LU ; Matusz, Steven; Sjöholm, Fredrik LU and Zhu, Susan LU (2017) In European Economic Review 100. p.273-292
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... (More)
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. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
occupational structure, globalization, multinational enterprises, exporters, offshoring
in
European Economic Review
volume
100
pages
20 pages
publisher
Elsevier
external identifiers
  • scopus:85032699947
ISSN
1873-572X
DOI
10.1016/j.euroecorev.2017.08.009
language
English
LU publication?
yes
id
2623ff75-5a6f-4be9-8051-40b4dec71605
date added to LUP
2017-10-06 15:37:23
date last changed
2018-01-07 12:21:08
@article{2623ff75-5a6f-4be9-8051-40b4dec71605,
  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.},
  author       = {Davidson, Carl and Heyman, Fredrik and Matusz, Steven and Sjöholm, Fredrik and Zhu, Susan},
  issn         = {1873-572X},
  keyword      = {occupational structure,globalization,multinational enterprises,exporters,offshoring},
  language     = {eng},
  pages        = {273--292},
  publisher    = {Elsevier},
  series       = {European Economic Review},
  title        = {Global Engagement and the Occupational Structure of Firms},
  url          = {http://dx.doi.org/10.1016/j.euroecorev.2017.08.009},
  volume       = {100},
  year         = {2017},
}