Trade, Employment and Wages in Sweden 1975-93

This paper investigates the effect of import competition on employment and wages in the Swedish manufacturing sector during 1975-93. Labour is divided into production and non-production workers respectively. The results show that import competition had a significant negative effect on the employment of both labour groups. The effect was larger for non-production workers than for production workers. Non-production worker real wages were not affected at all by import competition, while it had a negative effect on production worker real wages. Technological change had a significant negative effect on employment for both labour groups, and a positive effect on the real wage for non-production workers.