Mobility and earnings: An analysis of Finnish manufacturing and services

The economic turbulence that has characterised the Finnish economy over the past decade or so has had considerable impact on employment trends and thus on the mobility of individuals between jobs as well as between employment and non-employment. Apart from a marked shift in employment from manufacturing to service industries, both manufacturing and services have seen a growth in jobs in the latter half of the 1990s. These trends raise important questions, since the types of jobs created and, hence, the kinds of individuals recruited have varied and can be expected to continue to vary substantially across sectors and industries. This paper attempts to highlight the mobility issue by analysing the inflow into manufacturing jobs, on the one hand, and service sector jobs, on the other, with a distinction made between six categories depending on the labour force status of the recruited individuals. This can provide policy-relevant insight on the labour market success and failure of individuals differing in “recruitment background” in times of boom and recession and particularly in periods of rapid technological progress. Attempts are also made to compare the earnings of the six categories in terms of average earnings, earnings dispersion, and earnings growth. A comparison is also made of the “entering position” in the earnings distribution of those having been recruited to examine whether the quality of jobs seems to differ systematically across the six categories. Special attention is thereby paid to the flow into low-paid jobs and the “stability” of such employment. – earnings ; employment stability ; low pay ; manufacturing ; mobility ; retail trade ; service sector ; hotels and restaurants