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Occupational structures across 25 EU countries: the importance of industry structure and technology in old and new EU countries

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Abstract

This article analyzes the occupational structure of 25 European Union countries during the period 2000–2004. Shift-share analyses are used to decompose cross-country differences in occupational structure into within sector and between sectors effects. The static analysis for 2004 shows that the new member countries employ a lower share of skilled workers because their industry structure is biased towards less skill-intensive industries and because they use fewer skills within industries. The differences in the shares of (high-skilled) non-production workers are dominated by the between (industrial) effect. In contrast, the dynamic analysis of 2000–2004 showed that changes in the share of high-skilled non-production workers are mostly driven by within sector changes, which are probably related to skill-biased technological change. Similar trends in the countries’ within effects support the catch-up of the new member countries’ skills demand, while the structural developments that could equalize the industry mix of the new and old member countries are related to increased domestic demand and will probably take time.

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Notes

  1. E.g. Autor et al. (1998), Morrison and Siegel (2001), Baltagi and Rich (2005) for the US, Berman et al. (1998) for the US, UK and selected developed countries, Gera et al. (2001) for Canada, Edwards (2004) for South Africa, Salvanes and Førre (2003) for Norway, Sakurai (2001) for Japan, Kelly (2007) for Australia.

  2. Alternative measures of skills could be the wage bill share of non-production workers, the share of university degree workers or a codification of a special skill (e.g. cognitive) in a particular occupation. Despite minor differences between the occupational classifications used in different countries, the International Standard Classification of Occupations (ISCO-88) is considered to be consistent across countries at the aggregated level (Elias and McNight 2001).

  3. Many observations on implicit tax rates are lacking for the new member countries. The countries included in the NMS10 figures are the Czech Republic, Estonia, Lithuania and Slovakia. One should also notice that the tax bases could differ across countries.

  4. The large growth of high-skilled non-production occupations in Italy is probably to a large extent due to a major revision in classifying workers into high-skill occupations in the Italian survey.

  5. See e.g. Dekker et al. (1990) and Cörvers and Dupuy (2006) for the Netherlands, and Briscoe and Wilson (2003) for the UK.

  6. See Winchester et al. (2006) for a comparison of these two approaches and the implementation of cluster analysis to combine wage and educational information of occupational groups with the aim of deriving a composite measure of skills.

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Acknowledgements

We would like to thank Karsten Staehr, Aurelijus Dabusinskas and Tiiu Paas for their helpful comments. We also benefited from comments by the participants of the scientific seminar at the University of Tartu Faculty of Economics and Business Administration on 25 Oct.2006, the CEDEFOP workshop “Anticipating Europe’s skill needs” at the University of Warwick on 2–3 Nov. 2006, the U-know project meeting at the University of Sussex on 7−10 Nov. 2006, and the annual meeting of the Estonian Economic Society in Pärnu on 12–13 Jan. 2007. Jaanika Meriküll acknowledges financial support from the grant of Jüri Sepp, RMJRISEPP and from the EU 6th framework project CIT5-CT-028519. The authors alone are responsible for the remaining errors and inconsistencies.

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Authors and Affiliations

  1. Research Centre for Education and the Labour Market (ROA), Maastricht University, Maastricht, The Netherlands

    Frank Cörvers

  2. Faculty of Economics and Business Administration, University of Tartu, Tartu, Estonia

    Jaanika Meriküll

Authors
  1. Frank Cörvers
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  2. Jaanika Meriküll
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Correspondence to Jaanika Meriküll.

Appendices

Appendix A: ISCO classification at one-digit level (‘major groups’)

1.1 High-skilled non-production occupations

  1. Isco 1

    Legislators, senior officials and managers

  2. Isco 2

    Professionals

  3. Isco 3

    Technicians and associate professionals

1.2 Low-skilled non-production occupations

  1. Isco 4

    Clerks

  2. Isco 5

    Service workers and shop and market sales workers

1.3 Skilled production occupations

  1. Isco 6

    Skilled agricultural and fishery workers

  2. Isco 7

    Craft and related trades workers

  3. Isco 8

    Plant and machine operators and assemblers

1.4 Unskilled production occupations

  1. Isco 9

    Elementary occupations

1.5 Remaining occupations

  1. Isco 0

    Armed forces

  2. Isco un

    Occupational group unknown

Appendix B: NACE classification at one-digit level

  1. a

    Agriculture, hunting and forestry

  2. b

    Fishing

  3. c

    Mining and quarrying

  4. d

    Manufacturing

  5. e

    Electricity, gas and water supply

  6. f

    Construction

  7. g

    Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods

  8. h

    Hotels and restaurants

  9. i

    Transport, storage and communication

  10. j

    Financial intermediation

  11. k

    Real estate, renting and business activities

  12. l

    Public administration and defence; compulsory social security

  13. m

    Education

  14. n

    Health and social work

  15. o

    Other community, social and personal service activities

  16. p

    Private households with employed persons

  17. q

    Extra-territorial organizations and bodies

  18. un

    Sector unknown

Appendix C: Total differences in occupational shares between countries and EU averages

Table 7 Differences between member country’s and EU average occupational structures in 2004
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Appendix D: The industrial, within and interaction effects

Table 8 Between effects of the EU-25 countries’ occupational structures in 2004
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Table 9 Within effect of the EU25 countries’ occupational structures in 2004
Full size table
Table 10 Interaction effect of the EU25 countries’ occupational structures in 2004
Full size table

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Cörvers, F., Meriküll, J. Occupational structures across 25 EU countries: the importance of industry structure and technology in old and new EU countries. Econ Change 40, 327–359 (2007). https://doi.org/10.1007/s10644-008-9035-7

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