LABOUR FORCE BUILDING IN A RAPIDLY EXPANDING SECTOR

This paper attempts at developing an approach integrating industry dynamics with its labour force evolution by analysing inflows of labour into rapidly expanding knowledge intensive IT services sector in Sweden between 1991 and 2010. To analyse how requirements on incoming labour and the value put on different skills changed during this process, we look at entry conditions and post-entry performance of workers in the sector. Even though the IT sector was rather turbulent over the considered time period, the expectations, requirements and valuations for skills of new entrants into the sector consolidated fairly early. Industry evolution is reflected not so much in how employers value the skills of inflowing individuals over time, but change in who the industry hires over time. Most notably, higher education becomes an increasingly important entry ticket. Complementary to this finding is the striking importance of workers educated with a main profile in the social sciences. We also find strong evidence that an increasingly specialised labour market is growing around the industry, in related sectors, and that the collapse of the dot-com bubble played a particularly pronounced role for sectoral consolidation and restructuring. Overall, the paper suggests that analysis of inflowing labour could be used as one indicator of how new, and dynamic, industries actually are.