Explaining the Occupational Structure of Dutch Sectors of Industry, 1988-2002

Frank Cörvers, ROA, Maastricht University

In this paper a new model is developed to explain the occupational structure of Dutch sectors of industry. A non-homothetic production function takes account of capital-skill complementarities, skill-biased technological change and the interaction between labour demand and supply. The estimations provide some evidence for skill-biased technological change. The occupational structure of some sectors of industry respond more strongly than other sectors with respect to technological change and investments in capital. Technological change has the largest impact on the occupational structure of the public sectors and the metal industry and electronics. Capital-skill complementarities are least important in most of the services sectors of industry, whereas wage changes have the largest impact on the occupational mix in the hotel, catering and commercial services sector as well as in the health care and other public services sector. Increases in wage shares in particular favour the employment shares of high-skill professional occupations.

Date: 30 November-00 0000