Vol. 17, No. 1

Satu Nurmi:
Plant Size, Age and Growth in Finnish Manufacturing (pp. 3–17)


The purpose of this paper is to examine the relationships between plant size, age and employment growth in Finnish manufacturing during the period 1981–94. The findings suggest that Gibrat’s law fails to hold, i.e., small plants have higher growth rates than larger ones. The findings are robust to sample selection, unobserved heterogeneity and different model specifications. It is also found that plant age is negatively related to growth at least for younger plants, which is in accordance with learning models of firm growth. Furthermore, human capital factors and macroeconomic environment have significant effects on plant growth.

(JEL: J23, L11, L60)

Jukka Pirttilä:
Is International Labour Mobility a Threat to the Welfare State? Evidence from Finland in the 1990s (pp. 18–34)


This paper assesses the factors behind Finnish emigration and return migration in the 1990s. Logit-analysis using combined micro data from the labour force survey and emigration statistics in 1990–1999 reveals that, when controlling for other background characteristics, highly educated individuals are 5 times more prone to emigrate than individuals with secondary education only. There is no similar difference in the return migration propensities within individuals of different educational levels. Panel-data analysis based on country-level data on the migration destination countries of the (even highly educated) Finnish emigrants in 1990–2000 reveals, however, that migration has not been directed towards countries with low tax rates. These findings therefore suggest that while there is some evidence that the Finnish welfare state may suffer from the selection of emigration incidence on highly educated workforce, emigration has mainly been determined by other factors than potential tax competition on mobile labour.

(JEL: F22, H77, J61)

Jan Saarela and Fjalar Finnäs:
Interethnic Wage Variation in the Helsinki Area (pp. 35–48)


This paper compares wage income of Swedish-speaking and Finnish-speaking employees in the Helsinki metropolitan area. Longitudinal data are analysed with random-effects tobit models. We find that Swedish-speaking males on average have 17 per cent higher wages than Finnish-speaking males. Two thirds of this wage gap can be attributed to characteristics differences, particularly education and age. For females the wage difference is very small. The findings echo previous research in the sense that they point out a favourable labour market performance of the Swedish-speaking minority in Finland and that differences between language groups are larger among males than among females.

(JEL: J15, J31)

Finnish Economic Papers 1/2004