A Flexible Adjustment Model of Employment with Application to Zimbabwe's Manufacturing Industries
This paper presents a dynamic adjustment model of employment. The model is applied to a panel of ten Zimbabwean manufacturing industries observed over the period 1970-1993. The adjustment process is industry and time specific. The adjustment parameter is specified in terms of factors affecting the speed of adjustment. Industries are assumed to adjust their labour inputs towards a desired level of labour-use. A labour requirement function is specified in terms of observable variables and is used to model the desired level of labour-use. In evaluating alternative specifications, we used a flexible translog functional form where the labour requirement is a function of wages, output and capital stock. The empirical results show that in the long run, employment demand responds greatest to wages, followed by capital stock changes, and least by output. The sample mean annual speed of adjustment in employment is 33%. We further examined labour-use efficiency of different industries defined as the ratio of optimal to the observed level of employment. The rate of over-use of labour ranges across industries from 6.8% to 8.1% over the period of this study.
|Date of creation:||06 Nov 1998|
|Date of revision:||15 Aug 2003|
|Publication status:||Published as the book A Flexible Adjustment Model of Employment with Application to Zimbabwe's Manufacturing Industries, 2005, CEDAM.|
|Contact details of provider:|| Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden|
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Web page: http://www.hhs.se/
More information through EDIRC
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.:
- Manuel Arellano & Stephen Bond, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Oxford University Press, vol. 58(2), pages 277-297.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Pindyck, Robert S & Rotemberg, Julio J, 1983.
" Dynamic Factor Demands under Rational Expectations,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 85(2), pages 223-38.
- Pindyck, Robert S. & Rotemberg, Julio., 1982. "Dynamic factor demands under rational expectations," Working papers 1351-82., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Robert S. Pindyck & Julio J. Rotemberg, 1982. "Dynamic Factor Demands Under Rational Expectations," NBER Working Papers 1015, National Bureau of Economic Research, Inc.
- Baltagi, Badi H. & Griffin, James M., 1997. "Pooled estimators vs. their heterogeneous counterparts in the context of dynamic demand for gasoline," Journal of Econometrics, Elsevier, vol. 77(2), pages 303-327, April.
- Diewert, W E, 1974. "Functional Forms for Revenue and Factor Requirements Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 119-30, February.
- Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
- Peter R. Fallon & Robert E. B. Lucas, 1989.
"Job Security Regulations and the Dynamic Demand for Industrial Labor in India and Zimbabwe,"
Boston University - Institute for Economic Development
2, Boston University, Institute for Economic Development.
- Fallon, Peter R. & Lucas, Robert E. B., 1993. "Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe," Journal of Development Economics, Elsevier, vol. 40(2), pages 241-275, April.
- Kumbhakar, Subal C. & Hjalmarsson, Lennart, 1998. "Relative performance of public and private ownership under yardstick competition: electricity retail distribution," European Economic Review, Elsevier, vol. 42(1), pages 97-122, January.
- Kumbhakar, Subal C & Hjalmarsson, Lennart, 1995. "Labour-Use Efficiency in Swedish Social Insurance Offices," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(1), pages 33-47, Jan.-Marc.
- Kumbhakar, Subal C. & Heshmati, Almas & Hjalmarsson, Lennart, 2000.
"How Fast Do Banks Adjust? A Dynamic Model of Labor-Use with an Application to Swedish Banks,"
SSE/EFI Working Paper Series in Economics and Finance
411, Stockholm School of Economics, revised Nov 2001.
- Subal Kumbhakar & Almas Heshmati & Lennart Hjalmarsson, 2002. "How Fast Do Banks Adjust? A Dynamic Model of Labor-Use with an Application to Swedish Banks," Journal of Productivity Analysis, Springer, vol. 18(1), pages 79-102, July.
- John B. Knight, 1997. "Labour market policies and outcomes in Zimbabwe," CSAE Working Paper Series 1997-01, Centre for the Study of African Economies, University of Oxford.
When requesting a correction, please mention this item's handle: RePEc:hhs:hastef:0278. 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: (Helena Lundin)
If references are entirely missing, you can add them using this form.