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Industrialization and Labor Demand

Author

Listed:
  • Susan E. Skeath

    (Wellesley College)

Abstract

The effects of industrialization on labor demand in the manufacturing sector of a developing economy are linked to the industrial organization of that sector. Using a dominant firm-competitive fringe framework, one can incorporate the existence of both constant and increasing returns technologies in production and allow for the coexistence of both types of firms in the production of a variety of goods. Industrialization, defined as the expansion of dominant firms into the production of an increasing number of manufactured goods, can be either labor-saving or labor-using; neither outcome can be entirely ruled out. Labor creation is most likely to occur the more sensitive dominant firm output is to changes in cost and the less elastic is the fringe supply curve.

Suggested Citation

  • Susan E. Skeath, 1993. "Industrialization and Labor Demand," Eastern Economic Journal, Eastern Economic Association, vol. 19(2), pages 209-221, Spring.
  • Handle: RePEc:eej:eeconj:v:19:y:1993:i:2:p:209-221
    as

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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume19/V19N2P209_221.pdf
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    References listed on IDEAS

    as
    1. Ashenfelter, Orley & Heckman, James J, 1974. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply," Econometrica, Econometric Society, vol. 42(1), pages 73-85, January.
    2. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    3. Gronau, Reuben, 1973. "The Intrafamily Allocation of Time: The Value of the Housewives' Time," American Economic Review, American Economic Association, vol. 63(4), pages 634-651, September.
    4. Blundell, Richard W & Walker, Ian, 1982. "Modelling the Joint Determination of Household Labour Supplies and Commodity Demands," Economic Journal, Royal Economic Society, vol. 92(366), pages 351-364, June.
    5. Altonji, Joseph G, 1986. "Intertemporal Substitution in Labor Supply: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 176-215, June.
    6. Abowd, John M & Card, David, 1989. "On the Covariance Structure of Earnings and Hours Changes," Econometrica, Econometric Society, vol. 57(2), pages 411-445, March.
    7. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Industrialization;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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