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The Demand for Labor in the Long Run

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Author Info
Daniel S. Hamermesh

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Abstract

The theory of the demand for labor is presented along with a catalog and critique of methods that are used to estimate the parameters that describe empirical labor-demand and substitution possibilities. A critical survey is presented of studies of own-price demand elasticities for labor as a whole and for workers categorized by demographic group, of substitution parameters among workers of different types, and of workers for capital. The main findings are: 1) The long-run constant-output demand elasticity for labor that istreated as homogeneous is between .15 and .5; 2) Own-price demand elasticities are higher for workers that have less general human capital embodied and them; 3) Skilled labor and physical capital are p-complements; and 4) More tentatively, youths and wornenare q-substitutes in production. The implications and importance for policy of these and other results are discussed. Suggestions for improving the literature and narrowing the range of knowledge of the underlying parameters, especially by concentrating more on disaggregated and even microeconornic data, are presented.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1297.

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Date of creation: Apr 1987
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Handle: RePEc:nbr:nberwo:1297

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  1. Mauricio Cardenas & Raquel Bernal, 2003. "Determinants of Labor Demand in Colombia: 1976-1996," NBER Working Papers 10077, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Francesco Caselli, 2005. "Accounting for Cross-Country Income Differences," CEP Discussion Papers dp0667, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  3. Wollmer, F.J. & Butter, F.A.G. den & Hassink, W.H.J., 1991. "Technical progress, endogenous growth and labour productivity : a survey," Serie Research Memoranda 0075, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics. [Downloadable!]
  4. Rob J.M. Alessie & Hans Bloemen, 2000. "Premium Differentiation in the Unemployment Insurance System and the Demand for Labor," Tinbergen Institute Discussion Papers 00-020/3, Tinbergen Institute. [Downloadable!]
  5. Ernst R. Berndt & Catherine J. Morrison & Larry S. Rosenblum, 1992. "High-Tech Capital Formation and Labor Composition in U.S. Manufacturing Industries: An Exploratory Analysis," NBER Working Papers 4010, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Richard Quandt & Harvey Rosen, 1988. "Endogenous Output in an Aggregate Model of the Labor Market," Working Papers 625, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  7. Hassink, W.H.J. & Broersma, L., 1993. "Labour demand and job-to-job movement : macro-consequences as a result from micro-economic behaviour," Serie Research Memoranda 0001, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics. [Downloadable!]
  8. David Card, 1988. "Unexpected Inflation, Real Wages, and Employment Determination in Union Contracts," Working Papers 612, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  9. Basu, Swati & Estrin, Saul & Svejnar, Jan, 2004. "Employment Determination in Enterprises under Communism and in Transition: Evidence from Central Europe," IZA Discussion Papers 1370, Institute for the Study of Labor (IZA). [Downloadable!]
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  10. Prodromos-Ioannis Prodromidis, 2006. "Functional Economies Or Administrative Units in Greece: What Difference Does It Make for Policy?," ERSA conference papers ersa06p358, European Regional Science Association. [Downloadable!]
  11. Raimundo Soto, 2008. "Dollarization, Economic Growth, and Employment," Documentos de Trabajo 338, Instituto de Economía. Pontificia Universidad Católica de Chile.. [Downloadable!]
  12. Richard Quandt & Harvey Rosen, 1985. "Unemployment, Disequilibrium and the Short-Run Phillips Curve: An Econometric Approach," Working Papers 582, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  13. Gielen, A. C., 2007. "Working Hours Flexibility and Older Workers' Labor Supply," Discussion Paper 2007-49, Tilburg University, Center for Economic Research. [Downloadable!]
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  14. Rodrigo Cerda, 2003. "Labor Demand: Chile 1986-2001," Cuadernos de Economía (Latin American Journal of Economics), Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 478-484. [Downloadable!]
  15. Étienne Wasmer, 2006. "Links between Labor Supply and Unemployment: Theory and Empirics," Cahiers de recherche 0615, CIRPEE. [Downloadable!]
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  16. Sigfrido Lee & Carmen Urizar H., 2003. "The Effects of Unions on Productivity: Evidence from Large Coffee Producers in Guatemala," RES Working Papers 3166, Inter-American Development Bank, Research Department. [Downloadable!]
  17. Daniel S. Hamermesh, 1988. "Labor Demand and the Structure of Adjustment Costs," NBER Working Papers 2572, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Giovanna Aguilar & Sílvio Rendon, 2007. "Matching Bias in Labor Demand Estimation," IZA Discussion Papers 3076, Institute for the Study of Labor (IZA). [Downloadable!]
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  19. Giovanna Aguilar & Sílvio Rendon, 2007. "Employment and Deadweight Loss Effects of Observed Non-Wage Labor Costs," IZA Discussion Papers 2856, Institute for the Study of Labor (IZA). [Downloadable!]
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  20. Christian Helmenstein & Yury Yegorov, 1994. "The Dynamics of Migration in the Presence of Chains," Economics Working Papers 86, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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