IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Demand for labour inputs and adjustment costs: evidence from Spanish manufacturing firms

  • Alonso-Borrego, Cesar

This paper examines the structure of the adjustment costs for heterogeneous labour inputs, allowing for asyrnmetries and for interaction effects in adjustment costs. To do this, an intertemporal model underlying firm's employment decisions is postulated, and the resulting Euler equations for the demands of permanent nonproduction (white collar) and production (blue collar) employees are estimated using a sample of Spanish manufacturing firms. The main results confirm the heterogeneity of adjustment costs for permanent employees, and the existence of significant cross-adjustment effects. This latter result implies that marginal adjustment costs from firing permanent production employees can be reduced if temporary workers are hired at the same time. However, there is not significant evidence of asyrnmetric adjustment costs in permanent labour inputs.

(This abstract was borrowed from another version of this item.)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 5 (1998)
Issue (Month): 4 (December)
Pages: 475-497

in new window

Handle: RePEc:eee:labeco:v:5:y:1998:i:4:p:475-497
Contact details of provider: Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Pfann, Gerald A. & Verspagen, Bart, 1989. "The structure of adjustment costs for labour in the Dutch manufacturing sector," Economics Letters, Elsevier, vol. 29(4), pages 365-371.
  2. Pindyck, Robert S & Rotemberg, Julio J, 1983. " Dynamic Factor Demands under Rational Expectations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 85(2), pages 223-38.
  3. Sargent, Thomas J, 1978. "Estimation of Dynamic Labor Demand Schedules under Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 1009-44, December.
  4. Bresson, G & Kramarz, F & Sevestre, P, 1992. "Heterogeneous Labor and the Dynamics of Aggregate Labor Demand: Some Estimations Using Panel Data," Empirical Economics, Springer, vol. 17(1), pages 153-68.
  5. Burda, Michael C., 1991. "Monopolistic competition, costs of adjustment, and the behavior of European manufacturing employment," European Economic Review, Elsevier, vol. 35(1), pages 61-79, January.
  6. Palm, Franz C & Pfann, Gerard A, 1990. "Interrelated Demand Rational Expectations Models for Two Types of Labour," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(1), pages 45-68, February.
  7. Erica L. Groshen, 1991. "Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 869-884.
  8. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
  9. Hamermesh, Daniel S. & Pfann, Gerard Antonie, 1996. "Adjustment Costs in Factor Demand," CEPR Discussion Papers 1371, C.E.P.R. Discussion Papers.
  10. Nadiri, M Ishaq & Rosen, Sherwin, 1969. "Interrelated Factor Demand Functions," American Economic Review, American Economic Association, vol. 59(4), pages 457-71, Part I Se.
  11. PFANN, Gerard A. & PALM, Franz C., . "Asymmetric adjustment costs in non-linear labour demand models for the Netherlands and U.K. manufacturing sectors," CORE Discussion Papers RP 1044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. javier Andrés & Jaume García, 1991. "Una interpretación de las diferencias salariales entre sectores," Investigaciones Economicas, Fundación SEPI, vol. 15(1), pages 143-167, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:5:y:1998:i:4:p:475-497. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.