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

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