A critical readjustment : Analyzing the regional employment composition in Norway during times of change
Master thesis
Permanent lenke
http://hdl.handle.net/11250/2404536Utgivelsesdato
2016Metadata
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- Master Thesis [4380]
Sammendrag
The dramatic fall in the oil price, which started in June 2014, introduced a national debate
concerning the future of the petroleum sector in Norway. This thesis examines the sectoral
employment composition in Norway, and expands the country-level analysis by looking at
regional differences. The main focus is on Rogaland, which is clearly dependent on the
petroleum sector. Rogaland’s development is compared to three counties that are presumed to
be less petroleum dependent, namely Akershus, Oslo and Sør-Trøndelag.
The theoretical foundation is two-sector theory, which aims to explain how different sectors
develop as a response to increased resource wealth. The sectoral employment composition in
Norway has followed trends in line with the presented theory. The petroleum sector and the
non-tradable sector have both increased at the expense of the tradable sector, which has
gradually decreased in the period 2000 to 2014.
Labour migration to Norway increased considerably in 2004 and has remained high since
then. Rogaland experienced a shortage of labour and the highest average wage growth in the
country before the oil price fell. This led to Rogaland having the highest share of labour
immigration and the highest total employment growth. Rogaland now faces the highest
unemployment rate in the country. The excess of labour now leads to labour emigration rather
than immigration, which may dampen the unemployment growth.
Contrary to initial assumptions, the decrease in the tradable sector was less prominent in
Rogaland than the national average. Spillover effects from the petroleum sector and a strong
total employment growth can contribute to explain this. Furthermore, the non-tradable sector
in Rogaland stood out as the smallest among the analyzed counties. This indicates that
workers have reallocated from the non-tradable sector to the petroleum sector. The petroleum
sector in Rogaland has increased considerably during the analyzed time period. The reasons
and possible explanations for these findings are analyzed in detail, highlighting the
considerable regional variations in Norway.
The thesis concludes that the sectoral employment in Norway, and particularly in Rogaland, is
affected by the petroleum wealth. Finally, we conclude that the petroleum sector will be a part
of the Norwegian economy for many years to come, yet its relative importance for Norwegian
employment will decline.