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An Empirical Analysis of the Fixed Coefficient "Manpower Requirements" Model, 1960-1970

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  • Richard B. Freeman

Abstract

The fixed coefficient "manpower requirements" model has the advantage of providing information on the effect of changes in the industrial composition of an economy on demand for labor in highly disaggregated occupations, although at the cost of neglecting factor substitution. This study examines the ability of the fixed coefficient model to explain changes in employment in 3-digit occupations in the United States from 1960 to 1970 and develops an "augmented requirements" model that uses changes in wages as well as fixed coefficient shifts in demand to analyze changes in employment. The study finds that (1) by themselves, the requirements shifts account for much of the change in employment among detailed occupations in the period studied; (2) demand for detailed skills is far from zero elastic; and (3) the fixed coefficient model seems to work, not because demand and supply are economically unresponsive, but because the variation in the wage structure and corresponding incentive to alter input coefficient is moderate relative to the variation in the shift in demand due to changes in industrial mix.

Suggested Citation

  • Richard B. Freeman, 1980. "An Empirical Analysis of the Fixed Coefficient "Manpower Requirements" Model, 1960-1970," Journal of Human Resources, University of Wisconsin Press, vol. 15(2), pages 176-199.
    • Handle: RePEc:uwp:jhriss:v:15:y:1980:i:2:p:176-199
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    1. Kirill Borusyak & Peter Hull & Xavier Jaravel, 2025. "A Practical Guide to Shift-Share Instruments," Journal of Economic Perspectives, American Economic Association, vol. 39(1), pages 181-204, Winter.
    2. S F Seninger, 1988. "Labor Turnover and Employment Impacts in Regional Labor Markets," Environment and Planning A, , vol. 20(1), pages 41-53, January.
    3. Paolo Buonanno & Matteo M. Galizzi, 2009. "Advocatus, et non latro? Testing the supplier-induced demand hypothesis for Italian courts of justice," Working Papers 0914, University of Brescia, Department of Economics.
    4. repec:eee:labchp:v:1:y:1986:i:c:p:357-386 is not listed on IDEAS
    5. Massimiliano Calì & Carlo Menon, 2013. "Does Urbanization Affect Rural Poverty? Evidence from Indian Districts," The World Bank Economic Review, World Bank, vol. 27(2), pages 171-201.
    6. Lee, Jong-Wha & Wie, Dainn, 2015. "Technological Change, Skill Demand, and Wage Inequality: Evidence from Indonesia," World Development, Elsevier, vol. 67(C), pages 238-250.
    7. Davis, James C. & Paudel, Krishna P. & Rupasingha, Anil, 2025. "Income, Policy, and Water Pollution," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361283, Agricultural and Applied Economics Association.
    8. Willems, E., 1996. "Manpower forecasting and modelling replacement demand: an overview," ROA Working Paper 4E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    9. Per-Anders Edin & Bertil Holmlund, 1995. "The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy?," NBER Chapters, in: Differences and Changes in Wage Structures, pages 307-344, National Bureau of Economic Research, Inc.
    10. Peeters, H.M.M., 1990. "An explanation of the occupational and educational structure of employment by means of multinomial logit," ROA Working Paper 4E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    11. Mauricio Santamar√≠a, 2004. "Income Inequality, Skills And Trade: Evidence From Colombia During The 80s And 90s," Documentos CEDE 2832, Universidad de los Andes, Facultad de Economía, CEDE.
    12. Macartney, Hugh & Nielsen, Eric & Rodriguez, Viviana, 2021. "Unequal worker exposure to establishment deaths," Labour Economics, Elsevier, vol. 73(C).
    13. Chinhui Juhn, 1999. "Wage Inequality and Demand for Skill: Evidence from Five Decades," ILR Review, Cornell University, ILR School, vol. 52(3), pages 424-443, April.
    14. Gindling, T. H. & Sun, Way, 2002. "Higher education planning and the wages of workers with higher education in Taiwan," Economics of Education Review, Elsevier, vol. 21(2), pages 153-169, April.

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