Relative Demand for Skills in Swedish Manufacturing: Technology or Trade?

The rate of change in the share of skilled labor has increased steadily over the past 35 years in Swedish manufacturing. A closer inspection of the period after 1970 indicates that, while relative supply changes of skilled labor seem to have been the main driving force behind the growing skill shares in manufacturing industries over the period 1970–85, an acceleration in the relative demand for skills appears to have propelled higher skill shares during the late 1980s and at the beginning of the 1990s. Consistent with such a development is the finding of an increasing degree of complementarity between knowledge capital and skilled labor, and that Swedish manufacturing firms, in recent years, have invested heavily in R&D. There is also some support for the belief that intensified competition from the South has increased the relative demand for skilled labor. However, the impact appears to be small and essentially driven by the textile industry.     

Labor supply responses to marginal Social Security benefits: Evidence from discontinuities

A key question for Social Security reform is whether workers respond to the link on the margin between the Social Security taxes they pay and the Social Security benefits they will receive. We estimate the effects of the marginal Social Security benefits that accrue with additional earnings on three measures of labor supply: retirement age, hours, and labor earnings. We develop a new approach to identifying these incentive effects by exploiting five provisions in the Social Security benefit rules that generate discontinuities in marginal benefits or non-linearities in marginal benefits that converge to discontinuities as uncertainty about the future is resolved. We find that individuals approaching retirement (age 52 and older) respond to the Social Security tax-benefit link on the extensive margin of their labor supply decisions: we estimate that a 10% increase in the net-of-tax share reduces the two-year retirement hazard by a statistically significant 2.0 percentage points from a base rate of 15%. The evidence with regard to labor supply responses on the intensive margin is more mixed: we estimate that the elasticity of hours with respect to the net-of-tax share is 0.42 and statistically significant, but we do not find a statistically significant earnings elasticity. Though we lack statistical power to estimate results within subsamples precisely, the retirement response is driven mostly by the female subsample, while the hours response comes from the male subsample.     

Measuring the immeasurable — A survey of sustainability indices

Sustainability indices for countries provide a one-dimensional metric to valuate country-specific information on the three dimensions of sustainable development: economic, environmental, and social conditions. At the policy level, they suggest an unambiguous yardstick against which a country's development can be measured and even a cross-country comparison can be performed. This article reviews the explanatory power of various sustainability indices applied in policy practice. We show that these indices fail to fulfill fundamental scientific requirements making them rather useless if not misleading with respect to policy advice.