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Labour-Use Efficiency in the Tunisian's Manufacturing Industries: A Flexible Adjustment Model

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  • Ilham Haouas

    (CED_Team, Université Paris I)

  • Mahmoud Yagoubi

    (Crifes-Matisse, Université Paris I)

  • Almas Heshmati

    (UNU/WIDER, Helsinki)

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 1971-1996. 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 thesectors and over time.

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Bibliographic Info

Paper provided by Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV in its series Documents de travail with number 79.

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Length: 17 pages
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:mon:ceddtr:79

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  1. 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, vol. 77(2), pages 303-327, April.
  2. 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, vol. 58(2), pages 277-97, April.
  3. 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, vol. 18(1), pages 79-102, July.
  4. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
  5. Fallon, Peter R. & Lucas, Robert E. B., 1993. "Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe," Journal of Development Economics, Elsevier, vol. 40(2), pages 241-275, April.
  6. Kumbhakar, Subal C & Hjalmarsson, Lennart, 1995. "Labour-Use Efficiency in Swedish Social Insurance Offices," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(1), pages 33-47, Jan.-Marc.
  7. Robert S. Pindyck & Julio J. Rotemberg, 1982. "Dynamic Factor Demands Under Rational Expectations," NBER Working Papers 1015, National Bureau of Economic Research, Inc.
  8. Diewert, W E, 1974. "Functional Forms for Revenue and Factor Requirements Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 119-30, February.
  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 278, Stockholm School of Economics, revised 15 Aug 2003.
  10. Kumbhakar, Subal C. & Hjalmarsson, Lennart, 1998. "Relative performance of public and private ownership under yardstick competition: electricity retail distribution," European Economic Review, Elsevier, vol. 42(1), pages 97-122, January.
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Cited by:
  1. Heshmati, Almas, 2007. "Labor Market Policy Options of the Kurdistan Regional Government," IZA Discussion Papers 3247, Institute for the Study of Labor (IZA).
  2. repec:iza:izadps:dp1084 is not listed on IDEAS
  3. Ilham Haouas & Mahmoud Yagoubi, 2004. "Trade liberalization and demand labor elasticities : evidence from Tunisia," Documents de travail 94, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.

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