BOOMING SECTOR AND WAGE EFFECTS: AN EMPIRICAL ANALYSIS ON NORWEGIAN DATA

Within the framework of a segmented labour market model, andunder the assumption of market clearing wages in all sub-markets,this paper analyzes demand and cost-of-living effects whicha booming sector may create. The tests are based on data beforeand after the most intensive building-up period of the Norwegianpetroleum sector The empirical results indicate significantdemand effects for the most petroleum relevant occupations,and also positive cost-of-living effects in areas which areregionally close to this sector Overall there is evidence thatthe Norwegian petroleum sector has caused weak manufacturingperformance