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Estimates of labour demand elasticities and elasticities of substitution using firm-level manufacturing data

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  • Alberto Behar

Abstract

Using firm-level manufacturing data supplemented with wages from household survey data, this paper estimates translog cost functions to calculate labour demand elasticities and Allen Elasticities of Substitution between capital and four occupation types. It finds that own-price labour demand elasticities range from -0.56 to -0.8 , that capital and all occupation types are substitutes and that most occupation types are themselves complements.

Suggested Citation

  • Alberto Behar, 2004. "Estimates of labour demand elasticities and elasticities of substitution using firm-level manufacturing data," SALDRU/CSSR Working Papers 098, Southern Africa Labour and Development Research Unit, University of Cape Town.
    • Handle: RePEc:ldr:cssrwp:098
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    Cited by:

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    2. Muriel Hernández, Beatriz & Machicado Salas , Carlos Gustavo, 2014. "Empleo y Regulación Laboral: Análisis Empírico de Las Firmas Manufactureras Bolivianas, 1988-2007," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 21, pages 9-60, Mayo.
    3. He, Yu & Peng, Xiujian & Xu, Hangtian, 2020. "Overeducation, market recognition, and effective labour supply," China Economic Review, Elsevier, vol. 59(C).
    4. 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.
    5. Sparrow, G.N. & Ortmann, Gerald F. & Lyne, Michael C. & Darroch, Mark A.G., 2008. "Determinants of the demand for regular farm labour in South Africa, 1960-2002," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(1), pages 1-24, March.
    6. Vicente Ruiz, 2016. "Groundwater Overdraft, Electricity, and Wrong Incentives: Evidence from Mexico," Working Papers 2016.05, FAERE - French Association of Environmental and Resource Economists.
    7. Frederick C.v.N. Fourie, 2011. "The South African unemployment debate: three worlds, three discourses?," SALDRU Working Papers 63, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Alberto Behar, 2005. "Does training benefit those who do not get any? Elasticities of complementarity and factor price in South Africa," Economics Series Working Papers 244, University of Oxford, Department of Economics.

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