IDEAS home Printed from https://ideas.repec.org/p/fth/pensta/10-93-8.html

The Long-Run Demand for Labor: Estimates from Census Establishment Data

Author

Listed:
  • Dunne, T.
  • Roberts, M.

Abstract

This paper estimates long-run demand functions for production workers, production worker hours, and nonproduction workers using micro data from U.S. establishment surveys. The paper focuses on estimation of the wage and output elasticities of labor demand using data on over 41,000 U.S. manufacturing plants in 1975 and more than 30,000 plants in 1981. Particular attention is focused on the problems of unobserved producer heterogeneity and measurement errors in output that can affect labor demand estimates based on establishment survey data. The empirical results reveal that OLS estimates of both the own-price elasticity and the output elasticity of labor demand are biased downward as a result of unobserved heterogeneity. Differencing the data as a solution to this problem greatly exaggerates measurement error in the output coefficients. The use of capital stocks as instrumental variables to correct for measurement error in output significantly alters output elasticities in the expected direction but has no systematic effect on own-price elasticities. All of these patterns are found in estimates that pool establishment data across industries and in industry-specific regressions for the vast majority of industries. Estimates of the output elasticity of labor demand indicate that there are slight increasing returns for production workers and production hours, with a pooled data estimate of .92. The estimate for nonproduction workers in .98. The variation in the output elasticities across industries is fairly small. Estimates of the own-price elasticity vary more substantially with the year, type of differencing used, and industry. They average -.50 for production hours, -.41 for production workers, and -.44 for nonproduction workers. The price elasticities vary widely across manufacturing industries: the interquartile range for the industry estimates is approximately .40.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Dunne, T. & Roberts, M., 1993. "The Long-Run Demand for Labor: Estimates from Census Establishment Data," Papers 10-93-8, Pennsylvania State - Department of Economics.
    • Handle: RePEc:fth:pensta:10-93-8
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Douglas W Dwyer, 1995. "Whittling Away At Productivity Dispersion," Working Papers 95-5, Center for Economic Studies, U.S. Census Bureau.
    2. Ollinger, Michael & Nguyen, Sang V. & Blayney, Donald P. & Chambers, William & Nelson, Kenneth B., 2005. "Effect of Food Industry Mergers and Acquisitions on Employment and Wages," Economic Research Report 7250, United States Department of Agriculture, Economic Research Service.
    3. McGuckin, Robert H. & Nguyen, Sang V., 2001. "The impact of ownership changes: a view from labor markets," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 739-762, April.
    4. Lichter, Andreas & Peichl, Andreas & Siegloch, Sebastian, 2015. "The own-wage elasticity of labor demand: A meta-regression analysis," European Economic Review, Elsevier, vol. 80(C), pages 94-119.
    5. Sang V. Nguyen & Michael Ollinger, 2009. "Mergers and acquisitions, employment, wages, and plant closures in the U.S. meat product industries," Agribusiness, John Wiley & Sons, Ltd., vol. 25(1), pages 70-89.
    6. Sang V Nguyen & Robert H Mcguckin & Arnold P Reznek, 1995. "The Impact Of Ownership Change On Employment, Wages, And Labor Productivity In U.S. Manufacturing 1977-87," Working Papers 95-8, Center for Economic Studies, U.S. Census Bureau.
    7. Ollinger, Michael & Nguyen, Sang V. & Blayney, Donald P. & Chambers, William & Nelson, Kenneth B., 2006. "Food Industry Mergers and Acquisitions Lead to Higher Labor Productivity," Economic Research Report 7246, United States Department of Agriculture, Economic Research Service.
    8. Hanan Nazier, 2019. "Estimating Labor Demand Elasticities and Elasticities of Substitution in Egyptian Manufacturing Sector: A Firm-Level Static Analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(4), pages 549-575, December.
    9. Nathan Musick, 1998. "Heroic Plants: Persistently Rapid Job Creators in the Longitudinal Research Database - Their Distinguishing Characteristics and Contribution to Employment Growth," Industrial Organization 9811001, University Library of Munich, Germany.
    10. Fajnzylber, Pablo & Maloney, William F., 2001. "How comparable are labor demand elasticities across countries?," Policy Research Working Paper Series 2658, The World Bank.
    11. Mine Zeynep Senses, 2006. "The Effects of Outsourcing on the Elasticity of Labor Demand," Working Papers 06-07, Center for Economic Studies, U.S. Census Bureau.
    12. Nazier, Hanan, 2020. "Female labor in Egyptian manufacturing sector: The demand side story," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 1-11.
    13. Fajnzylber, Pablo & Maloney, William F., 2005. "Labor demand and trade reform in Latin America," Journal of International Economics, Elsevier, vol. 66(2), pages 423-446, July.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fth:pensta:10-93-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/depsuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.