Traditional trade theory assumes full flexibility in the labor market which would imply full employment. New theory, on the other hand, stresses that wages are sticky and that the matching process between employers and employees can give rise to long-term unemployment. Furthermore, these jobs imply that the effect on a certain type of labor force, for example in terms of wage changes, can differ depending on the type of firm. Increased globalization can for example lead to increased wages for the type of laborer whose qualifications best match the company profile. These newer theories result in a number of hypotheses on internationalization and labor market effects which we aim to empirically investigate using Swedish data.
The empirical analysis is based on a large collection of data on the Swedish labor force which can be matched with data on Swedish firms. For instance, we investigate the wage and employment effects of increased internationalization for different types of labor and in different types of firms.
The project is a collaboration between Swedish empirical researchers and prominent theoretically-oriented American researchers.