Changes in the occupational structure of Nordic employment: Upgrading or polarization?

This paper studies whether the occupational structure in Nordic labour markets is changing in the direction of upgrading or polarization. Upgrading refers to an increase of employment in highly skilled/paid occupations, while low-skilled/paid jobs decline. Polarization refers to simultaneously growing shares of employment in occupations in the high and low ends, while the share of occupations in the middle declines. According to previous research, there are some indications of polarization in Nordic labour markets in recent decades, although the evidence is not conclusive. The empirical data of this study stem from the Labour Force Surveys in Denmark, Norway and Sweden the period 2000-2015. The results show clear tendencies towards polarization in Denmark, especially after the 2008 crisis, while upgrading is the dominant tendency in Norway in recent years. The tendencies in Sweden lie between these two countries, showing clear upgrading in the public sector and modest signs of polarization in private sector. By studying the occupational changes in more detail, we find some evidence suggesting that technological change is a main driver of change. However, the analysis also indicates that political and economic factors influencing labour demand in the public and private sector respectively are important to take into consideration to understand occupational change in the Nordic region.