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Labour-Use Efficiency in Tunisian Manufacturing Industries

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Author Info

  • Haouas, Ilham

    ()
    (Abu Dhabi University)

  • Yagoubi, Mahmoud

    ()
    (University of Paris 1 Panthéon-Sorbonne)

  • Heshmati, Almas

    ()
    (Jönköping University, Sogang University)

Abstract

This paper investigates the process of adjustment in employment. A dynamic model is applied to a panel of six Tunisian manufacturing industries observed over the period 1971–96. The adjustment process is industry and time specific. The adjustment parameter is specified in terms of factors affecting the speed of adjustment. Industries are assumed to adjust their labour inputs towards a desired level of labour-use. A translog labour requirement function is specified in terms of observable variables and is used to model the desired level of labour-use. The labour requirement is specified to be function of wages, output, quasi-fixed capital stock and technology. The empirical results show that in the long run, employment demand responds greatest to value-added, followed by capital stock changes, and least by wages. The speed of adjustment in employment and the degree of labour-use efficiency show large variations among the sectors and over time.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 687.

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Length: 25 pages
Date of creation: Jan 2003
Date of revision:
Publication status: published in: Review of Middle East Economics and Finance, 2003, 1 (3), 195-214
Handle: RePEc:iza:izadps:dp687

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Keywords: dynamics; employment; labour-use efficiency; panel data; Tunisia; speed of adjustment; technical change;

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References

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  1. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, Elsevier, vol. 65(1), pages 9-15, October.
  2. Kumbhakar, Subal C. & Hjalmarsson, Lennart, 1998. "Relative performance of public and private ownership under yardstick competition: electricity retail distribution," European Economic Review, Elsevier, Elsevier, vol. 42(1), pages 97-122, January.
  3. Peter R. Fallon & Robert E. B. Lucas, 1989. "Job Security Regulations and the Dynamic Demand for Industrial Labor in India and Zimbabwe," Boston University - Institute for Economic Development, Boston University, Institute for Economic Development 2, Boston University, Institute for Economic Development.
  4. Pindyck, Robert S. & Rotemberg, Julio., 1982. "Dynamic factor demands under rational expectations," Working papers, Massachusetts Institute of Technology (MIT), Sloan School of Management 1351-82., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  5. Baltagi, Badi H. & Griffin, James M., 1997. "Pooled estimators vs. their heterogeneous counterparts in the context of dynamic demand for gasoline," Journal of Econometrics, Elsevier, Elsevier, vol. 77(2), pages 303-327, April.
  6. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  7. Subal Kumbhakar & Almas Heshmati & Lennart Hjalmarsson, 2002. "How Fast Do Banks Adjust? A Dynamic Model of Labor-Use with an Application to Swedish Banks," Journal of Productivity Analysis, Springer, Springer, vol. 18(1), pages 79-102, July.
  8. Kumbhakar, Subal C & Hjalmarsson, Lennart, 1995. "Labour-Use Efficiency in Swedish Social Insurance Offices," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 10(1), pages 33-47, Jan.-Marc.
  9. Heshmati, Almas & Ncube, Mkhululi, 1998. "A Flexible Adjustment Model of Employment with Application to Zimbabwe's Manufacturing Industries," Working Paper Series in Economics and Finance, Stockholm School of Economics 278, Stockholm School of Economics, revised 15 Aug 2003.
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Cited by:
  1. Jaan Masso & Almas Heshmati, 2003. "The Optimality And Overuse Of Labour In Estonian Manufacturing Enterprises," University of Tartu - Faculty of Economics and Business Administration Working Paper Series, Faculty of Economics and Business Administration, University of Tartu (Estonia) 20, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  2. Shabbar Jaffry & Yaseen Ghulam & Joe Cox, 2006. "Impact of Regulatory Reforms on Labour Efficiency in the Indian and Pakistani Commercial Banks," The Pakistan Development Review, Pakistan Institute of Development Economics, Pakistan Institute of Development Economics, vol. 45(4), pages 1085-1102.
  3. Mollick, André Varella, 2009. "Employment Responses of Skilled and Unskilled Workers at Mexican Maquiladoras: The Effects of External Factors," World Development, Elsevier, Elsevier, vol. 37(7), pages 1285-1296, July.
  4. Jaffry, Shabbar & Ghulam, Yaseen & Cox, Joe, 2008. "Labour use efficiency in the Indian and Pakistani commercial banks," Journal of Asian Economics, Elsevier, Elsevier, vol. 19(3), pages 259-293, June.

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