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The demand for labor in the long run

In: Handbook of Labor Economics

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  • Hamermesh, Daniel S.

Abstract

The theory of the demand for labor is presented along with a catalog and critique of methods that are used to estimate the parameters that describe empirical labor-demand and substitution possibilities. A critical survey is presented of studies of own-price demand elasticities for labor as a whole and for workers categorized by demographic group, of substitution parameters among workers of different types, and of workers for capital. The main findings are: 1) The long-run constant-output demand elasticity for labor that istreated as homogeneous is between .15 and .5; 2) Own-price demand elasticities are higher for workers that have less general human capital embodied and them; 3) Skilled labor and physical capital are p-complements; and 4) More tentatively, youths and wornenare q-substitutes in production. The implications and importance for policy of these and other results are discussed. Suggestions for improving the literature and narrowing the range of knowledge of the underlying parameters, especially by concentrating more on disaggregated and even microeconornic data, are presented.
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Suggested Citation

  • Hamermesh, Daniel S., 1987. "The demand for labor in the long run," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 8, pages 429-471 Elsevier.
  • Handle: RePEc:eee:labchp:1-08
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    Cited by:

    1. Caselli, Francesco, 2005. "Accounting for Cross-Country Income Differences," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741 Elsevier.
    2. Mauricio Cardenas & Raquel Bernal, 2004. "Determinants of Labor Demand in Colombia. 1976-1996," NBER Chapters,in: Law and Employment: Lessons from Latin America and the Caribbean, pages 229-272 National Bureau of Economic Research, Inc.
    3. Ernst R. Berndt & Catherine J. Morrison & Larry S. Rosenblum, 1992. "High-Tech Capital Formation and Labor Composition in U.S. Manufacturing Industries: An Exploratory Analysis," NBER Working Papers 4010, National Bureau of Economic Research, Inc.
    4. repec:bdr:bdrcap:2012-12-289-330 is not listed on IDEAS
    5. Helmenstein, Christian & Yegorov, Yury, 2000. "The dynamics of migration in the presence of chains," Journal of Economic Dynamics and Control, Elsevier, vol. 24(2), pages 307-323, February.
    6. Swati Basu & Saul Estrin & Jan Svejnar, 2005. "Employment Determination in Enterprises under Communism and in Transition: Evidence from Central Europe," ILR Review, Cornell University, ILR School, vol. 58(3), pages 353-369, April.
    7. Fadinger, Harald, 2011. "Productivity differences in an interdependent world," Journal of International Economics, Elsevier, vol. 84(2), pages 221-232, July.
    8. Prodromos-Ioannis Prodromidis, 2006. "Functional Economies Or Administrative Units in Greece: What Difference Does It Make for Policy?," ERSA conference papers ersa06p358, European Regional Science Association.
    9. Rodrigo Cerda, 2003. "Labor Demand: Chile 1986-2001," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 478-484.
    10. Medina-Durango, Carlos Alberto & Posso Suárez, Christian Manuel & Tamayo, Jorge A. & Monsalve, Emma, 2012. "Dinámica de la demanda laboral en la industria manufacturera colombiana 1993-2009 : una estimación panel VAR," Chapters,in: Arango-Thomas, Luis Eduardo & Hamann-Salcedo, Franz Alonso (ed.), El mercado de trabajo en Colombia : hechos, tendencias e instituciones, chapter 7, pages 289-330 Banco de la Republica de Colombia.
    11. Etienne Wasmer, 2009. "Links between labor supply and unemployment: theory and empirics," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(3), pages 773-802, July.
    12. Hamermesh, Daniel S, 1989. "Labor Demand and the Structure of Adjustment Costs," American Economic Review, American Economic Association, vol. 79(4), pages 674-689, September.
    13. Anne C. Gielen, 2009. "Working hours flexibility and older workers' labor supply," Oxford Economic Papers, Oxford University Press, vol. 61(2), pages 240-274, April.
    14. Giovanna Aguilar & Sílvio Rendon, 2010. "Employment And Deadweight Loss Effects Of Observed Nonwage Labor Costs," Economic Inquiry, Western Economic Association International, vol. 48(3), pages 793-809, July.
    15. Sigfrido Lee & Carmen Urizar H., 2003. "The Effects of Unions on Productivity: Evidence from Large Coffee Producers in Guatemala," Research Department Publications 3166, Inter-American Development Bank, Research Department.
    16. repec:kap:decono:v:165:y:2017:i:2:d:10.1007_s10645-017-9298-3 is not listed on IDEAS
    17. Aguilar, Giovanna & Rendon, Si­lvio, 2008. "Matching bias in labor demand estimation," Economics Letters, Elsevier, vol. 100(2), pages 297-299, August.
    18. repec:taf:applec:45:y:2013:i:18:p:2547-2562 is not listed on IDEAS

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    • J0 - Labor and Demographic Economics - - General

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