OECD Trade Policy Papers
This series is designed to make available to a wider readership selected trade policy studies prepared for use within the OECD.
NB. No. 1 to No. 139 were released under the previous series title OECD Trade Policy Working Papers.
- ISSN: 18166873 (online)
- https://doi.org/10.1787/18166873
International Production Networks in the Nordic/Baltic Region
The Nordic countries are characterized by relatively compressed wage structures, implying that the
incentives to offshore activities intensive in low-skilled labour might be particularly strong in these
countries. In this paper, we document the recent changes in measures of offshoring and find that there has
been an overall increase since the mid 1990s but that the experience varies considerably across sectors. We
also document the recent trends in wage-bill shares of workers with different levels of educational
attainment. As in most industrialized countries, there has been an overall increase in the wage-bill share of
highly educated workers, a development that is relatively uniform across sectors.
In an econometric analysis we estimate the relationship between offshoring of intermediate input
production and labour demand in Sweden, Finland and Norway, distinguishing between workers with
different educational attainments. We only find weak relationships. In this sense, the results suggest that
the gains from an increased specialisation due to fragmentation of production and the emergence of
production networks involving low-wage countries are reaped without any large adverse effects on income
distribution. For Sweden, we find that offshoring to low-income countries is associated with a shift in
demand towards workers with a relatively high level of education. For Finland, however, it is rather
offshoring to high-income countries that is associated with such a shift. Moreover, in the Swedish case the
shift is away from workers with upper secondary education whereas in the Finnish case it is away from
workers with lower secondary education.
Keywords: labour demand, skill upgrading, Nordic, manufacturing, outsourcing, Baltic
- Click to access:
-
Click to download PDF - 482.88KBPDF
-
Click to Read online and shareREAD