Working Paper No. 1026

Global Engagement and the Occupational Structure of Firms

Published: May 27, 2014, revised May 2015 and August 2017Pages: 40Keywords: Occupational structure; Globalization; Multinational Enterprises; ExportersJEL-codes: F10; F20
Published version

Global Engagement and the Occupational Structure of Firms Carl Davidson, Fredrik Heyman, Steven Matusz, Fredrik Sjöholm and Susan Chun Zhu


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. 

Fredrik Heyman

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Ph: +46 8 665 4537
fredrik.heyman@ifn.se

Fredrik Sjöholm

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Ph: +46 46 222 74 26
fredrik.sjoholm@nek.l...

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