Models of Labour Services and Estimates of Total Factor Productivity
AbstractThis paper examines the manner in which labour services are modelled in the aggregate production function, concentrating on the relationship between numbers employed and average hours worked. It argues that numbers employed and hours worked are not perfect substitutes and that conventional estimates of total factor productivity which, by using total hours worked as the measure of labour services, assume they are perfect substitutes, will be biased when there are marked changes in average hours worked. The relevance of the theoretical argument is illustrated using data for the United States and the United Kingdom.
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Bibliographic InfoPaper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 981.
Length: 14 pages
Date of creation: 2007
Date of revision:
Contact details of provider:
Postal: Department of Economics, The University of Melbourne, 5th Floor, Economics and Commerce Building, Victoria, 3010, Australia
Phone: +61 3 8344 5289
Fax: +61 3 8344 6899
Web page: http://www.economics.unimelb.edu.au
More information through EDIRC
Labour Services; Production Function; Total Factor Productivity;
Other versions of this item:
- Robert Dixon & David Shepherd, 2010. "Models of labour services and estimates of total factor productivity," Applied Economics, Taylor and Francis Journals, vol. 42(28), pages 3629-3634.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-17 (All new papers)
- NEP-EFF-2007-02-17 (Efficiency & Productivity)
- NEP-MAC-2007-02-17 (Macroeconomics)
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