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EU KLEMS Project

Workpackage 8: Labour Markets and Skill Formation (12 months)


  • Study the relation between productivity and demand for specific labour skills.
  • Analyze the effect of international outsourcing on the skill composition of the labour force.

    Description of work
    Derive and estimate a multi-equation input demand system with different types of labour skills and capital as quasifixed factors. Factor demand will be estimated for each country, and factor substitution elasticities, measuring the price sensitivity of different labour types and capital inputs from the EU KLEMS Productivity Database, are derived to study the impact of output and productivity growth on employment. Also look at substitution between different age and gender groups within a given skill group.

    Explore various models of skill biased technological change (SBTC) using the skill data from the EU KLEMS database, with a view to establishing whether there is an EU model of SBTC in contrast to the US. These models include wage and employment share equations, studies including impact of labour and product market regulations on skill formation, and more sophisticated models to analyze the patterns of skills within a more holistic framework.

    Quantify the effects of international outsourcing on employment of skilled and unskilled labour, through characterizing production technologies at industry level by distinguishing between high-tech and low-tech components, and quantify the employment effects for skilled and unskilled labour of changes in the trade and production structure.

    Sources are EU KLEMS Productivity Database for measures of intermediate inputs and capital, OECD Trade Statistics for trade measures.

    Primary Contact
    Martin Falk, Österreichisches Institut für Wirtschaftsforschung (WIFO)

    Workpackage Material

  • Martin Falk and Kate Robinson (2005), Research Ideas for WP8 in the EU KLEMS project
  • Presentation Brussels Meeting 1 December 2005

  • EUKLEMS WP8 Background papers

  • Martin Falk and Yvonne Wolfmayr (2005), The Impact of International Outsourcing on Employment: Empirical Evidence from EU Countries, WIFO
  • Martin Falk (2005), The Demand for Heterogeneous Labour, WIFO Vienna

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    This project is funded by the European Commission, Research Directorate General as part of the 6th Framework Programme, Priority 8, "Policy Support and Anticipating Scientific and Technological Needs".

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    Last changed on: 1 August 2006