Effects on employment of trade and technical change: Evidence from Norway

Trade and technology-related explanations for the change in plant-level skill composition in Norway are examined by exploiting matched employer-employee data. The results show that the changes are taking place mainly through a reallocation of labour resources between plants within sectors, leading to greater dispersion of skills across establishments. Results from estimating plant-level dynamic demand functions support skill-biased technological change via a positive gross job creation effect. A strong impact from trade is also found along the gross job destruction margin for low- and medium-educated workers in sectors exposed to increased competition from abroad. Highly educated workers are insulated from negative trade effects.