Browsing by Subject "Kouluttamaton työvoima"

The number of unskilled workers working in Finnish manufacturing has been declining in recent years. From 2010 to 2017 the total number of workers in Finnish manufacturing declined by roughly 40 000 workers and the number of unskilled workers, as defined in this paper, declined by roughly 30 000 workers during the same time-period. This paper examines the role that outward foreign direct investment has played in the decline of the employment of unskilled workers in Finnish manufacturing over the years 2010-2017 and whether foreign direct investment directed to certain countries has contributed to the decline more than investment directed to other countries. Theories on international fragmentation of production suggest that the most unskilled labour-intensive processes are shifted to countries more abundant in unskilled labour. To estimate the effects of foreign direct investment on the number of unskilled workers working in Finnish manufacturing a dataset containing the average annual wage of all workers in Finnish manufacturing, the value of output, the value of the stock of machinery and the number of employees in foreign affiliates is used. The dataset covers the years 2010-2017.Turnover in foreign affiliates and the value of imported intermediate goods are used as alternative measures for foreign direct investment in separate models. The regression model is a first differences model where the number of unskilled workers is the dependent variable and the other variables mentioned above are the independent variables. The first differences models do not yield any statistically significant results and neither do alternative specifications used in this paper, which are a second differences estimator and a lagged effects estimator where the all other variables are differenced twice and the variable describing foreign direct investment is differenced once. These results do not necessarily mean that foreign direct investment has played no role in the decline of the number of unskilled workers working in Finnish manufacturing but the effects are not significant on an aggregated industry level. This question should be studied more carefully using more specific industry-level data or even firm-level data.