It is no exaggeration to say that the globalization process that Sweden is currently undergoing is of historic proportions. The project aims to empirically investigate the labor market effects of increased international integration and is based on new economic theory with heterogeneous firms and heterogeneous labor force. Traditional trade theory assumes that the labor market is completely flexible, resulting in full employment. More recent theory instead emphasizes that wages are sticky and that the matching process between workers and employers can lead to long-term unemployment. Furthermore, this work suggests that the impact on a particular type of worker, e.g. in terms of wage changes, may differ depending on the type of firm. For example, increased globalization may lead to higher wages for the type of worker whose qualifications best match the firm's profile. These recent theoretical works thus result in a number of different hypotheses about internationalization and labor market effects that we intend to investigate empirically using Swedish data. The empirical analysis is based on a large data set of Swedish workers that can be matched with data on Swedish firms. For example, we examine the wage and employment effects of increased internationalization for different types of workers and in different types of firms.