Policy reform and labour demand in branches of Sri Lankan manufacturing industry
Many policy reforms in developing countries aim to remove factor market distortions. Whether such reforms reduce unemployment depends partly on the substitution possibilities between labour and other factors of production. This paper examines labour demand in seven branches of Sri Lankan manufacturing industry, using data on 4-digit industrial categories over the 1990 to 1997 period. The Box-Cox transformation is used to allow for flexible, and data-dependent, elasticities. The elasticity of capital-labour substitution varies widely across the branches of industry and is usually variable rather than constant. The average, long-run own-wage elasticity of labour demand for the manufacturing sector is estimated as -0.80, so factor price policy should have an important effect on labour demand in this setting.
Volume (Year): 38 (2006)
Issue (Month): 12 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
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.:
- Freeman, Richard B & Medoff, James L, 1982. "Substitution between Production Labor and Other Inputs in Unionized and Nonunionized Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 220-33, May.
- Reghubendra, J. & Murty, M.N. & Paul, S. & Rao, B.B., 1992. "An Analysis of Technological Change, Factor Substitution and Economies of Scale in Manufacturing Industries in India," Papers e9214, Western Sydney - School of Business And Technology.
- Laumas, Prem S. & Williams, Martin, 1981. "The elasticity of substitution in India's manufacturing sector," Journal of Development Economics, Elsevier, vol. 8(3), pages 325-337, June.
- Hsing, Yu, 1989. "Testing for the functional form of labor-demand equations: The textile industry," Journal of Economics and Business, Elsevier, vol. 41(4), pages 355-364, November.
- Prema-chandra Athukorala & Sisira Jayasuriya, 2000. "Trade Policy Reforms and Industrial Adjustment in Sri Lanka," The World Economy, Wiley Blackwell, vol. 23(3), pages 387-404, 03.
- Kwon, Jene K. & Williams, Martin, 1982. "The structure of production in South Korea's manufacturing sector," Journal of Development Economics, Elsevier, vol. 11(2), pages 215-226, October.
- Athukorala, Prema-chandra & Rajapatirana, Sarath, 2000. "Liberalization and Industrial Transformation: Lessons from the Sri Lankan Experience," Economic Development and Cultural Change, University of Chicago Press, vol. 48(3), pages 543-72, April.
- Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, June.
- Lane, Julia & Hakim, Guillermo & Miranda, Javier, 1999. "Labor Market Analysis and Public Policy: The Case of Morocco," World Bank Economic Review, World Bank Group, vol. 13(3), pages 561-78, September.
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:38:y:2006:i:12:p:1459-1467. 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: (Michael McNulty)
If references are entirely missing, you can add them using this form.