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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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    References listed on IDEAS

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    1. Fallon, P R & Layard, P R G, 1975. "Capital-Skill Complementarity, Income Distribution, and Output Accounting," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 279-301, April.
    2. Dougherty, C R S, 1972. "Estimates of Labor Aggregation Functions," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1101-1119, Nov.-Dec..
    3. Tinbergen, Jan, 1974. "Substitution of Graduate by Other Labour," Kyklos, Wiley Blackwell, vol. 27(2), pages 217-226.
    4. Psacharopoulos, George & Hinchliffe, Keith, 1972. "Further Evidence on the Elasticity of Substitution among Different Types of Educated Labor," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 786-792, July-Aug..
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    Cited by:

    1. 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.
    2. 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.
    3. Peeters, H.M.M., 1990. "An explanation of the occupational and educational structure of employment by means of multinomial logit," MPRA Paper 23615, University Library of Munich, Germany.
    4. 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.
    5. repec:eee:labchp:v:1:y:1986:i:c:p:357-386 is not listed on IDEAS

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