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Interrelated Demand Rational Expectations Models for Two Types of Labour

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  • Palm, Franz C
  • Pfann, Gerard A

Abstract

In this paper, the authors derive and estimate optimal dynamic interrelated labor demand curves for Dutch manufacturing blue and white collar labor. The driving forces of the labor demand model are the predetermined capital stock and the real wage costs of the two types of labor. Interrelation between the demand for two types of labor results only from the presence of serial correlation between the exogenous shocks of the forcing variables. It is found to be optimal for the firm to raise the number of white collar workers employed when increasing its blue collar work force. On the other hand, a single upswing in white collar employment has a displacement effect on the blue collar workers. Copyright 1990 by Blackwell Publishing Ltd

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Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.

Volume (Year): 52 (1990)
Issue (Month): 1 (February)
Pages: 45-68

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Handle: RePEc:bla:obuest:v:52:y:1990:i:1:p:45-68

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Cited by:
  1. Franz, Wolfgang & Smolny, Werner, 1993. "The measurement and interpretation of vacancy data and the dynamics of the Beveridge-curve: The German case," Discussion Papers 4, University of Konstanz, Center for International Labor Economics (CILE).
  2. Smolny, Werner, 1993. "Non-linear models of employment adjustment," Discussion Papers 8, University of Konstanz, Center for International Labor Economics (CILE).
  3. Palm, Franz C. & Pfann, Gerard A., 1998. "Sources of asymmetry in production factor dynamics," Journal of Econometrics, Elsevier, vol. 82(2), pages 361-392, February.
  4. Robertson, Raymond & Dutkowsky, Donald H., 2002. "Labor adjustment costs in a destination country: the case of Mexico," Journal of Development Economics, Elsevier, vol. 67(1), pages 29-54, February.
  5. Alonso-Borrego, Cesar, 1998. "Demand for labour inputs and adjustment costs: evidence from Spanish manufacturing firms," Labour Economics, Elsevier, vol. 5(4), pages 475-497, December.

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