Hours of Work: A Demand Perspective
In Australia, and in other countries, we observe at any one time a wide distribution of hours worked per week. We develop a cost-minimising model to explain employer choices over the number of employees and their hours of work. An important finding is that hours of work and the number of employees are not perfect substitutes. We show that this has important implications for the way economists model labour demand and measure productivity. We show that estimates using total hours worked as the measure of labour input implicitly assumes perfect substitution of persons and hours and results, inter alia, in an overestimation of the rate of labour and multifactor productivity growth in Australia and especially in the period prior to the so called ‘productivity slow-down’.
|Date of creation:||2007|
|Contact details of provider:|| Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia|
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
Web page: http://fbe.unimelb.edu.au/economics
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.:
- Booth, Alison & Ravallion, Martin, 1993. "Employment and Length of the Working Week in a Unionized Economy in which Hours of Work Influence Productivity," The Economic Record, The Economic Society of Australia, vol. 69(207), pages 428-436, December.
- Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 1-9.
- Hart,Robert A. & Kawasaki,Seiichi, 1999.
"Work and Pay in Japan,"
Cambridge University Press, number 9780521577724, December.
- F. P. R. Brechling, 1965. "The Relationship between Output and Employment in British Manufacturing Industries," Review of Economic Studies, Oxford University Press, vol. 32(3), pages 187-216.
- Bill Russell & Warren J. Tease, 1988.
"Employment, Output and Real Wages,"
RBA Research Discussion Papers
rdp8806, Reserve Bank of Australia.
- Kapteyn, Arie & Kalwij, Adriaan & Zaidi, Asghar, 2000.
"The Myth of Worksharing,"
IZA Discussion Papers
188, Institute for the Study of Labor (IZA).
- Kapteyn, A. & Kalwij, A. & Zaidi, A., 2000. "The Myth of Worksharing," Economics Series Working Papers 9932, University of Oxford, Department of Economics.
- Arie Kapteyn, 2000. "The Myth of Worksharing," Economics Series Working Papers 32, University of Oxford, Department of Economics.
- Kapteyn, A. & Kalwij, A.S. & Zaidi, M.A., 2000. "The Myth of Worksharing," Discussion Paper 2000-23, Tilburg University, Center for Economic Research.
- Mark Wooden & Robert Drago, 2007. "The Changing Distribution of Working Hours in Australia," Melbourne Institute Working Paper Series wp2007n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
- Robert Dixon & John Freebairn & G.C. Lim, 2005. "An Employment Equation for Australia," The Economic Record, The Economic Society of Australia, vol. 81(254), pages 204-214, 09.
- Bell, David N F, 1982. "Labour Utilization and Statutory Non-Wage Costs," Economica, London School of Economics and Political Science, vol. 49(195), pages 335-343, August.
- M. S. Feldstein, 1967. "Specification of the Labour Input in the Aggregate Production Function," Review of Economic Studies, Oxford University Press, vol. 34(4), pages 375-386.
- Calmfors, Lars & Hoel, Michael, 1989. "Work Sharing, Employment and Shiftwork," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 758-773, October.
- Guy Debelle & James Vickery, 1998. "The Macroeconomics of Australian Unemployment," RBA Annual Conference Volume, in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia.
- Ana Paula Martins, 2004. "The Employment-Hours Trade-off: Theory and an Application to the Portuguese Case," LABOUR, CEIS, vol. 18(3), pages 465-502, 09.
- Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538-538.
- David M. Cutler & Brigitte C. Madrian, 1998.
"Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked,"
RAND Journal of Economics,
The RAND Corporation, vol. 29(3), pages 509-530, Autumn.
- David M. Cutler & Brigitte C. Madrian, 1996. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," NBER Working Papers 5525, National Bureau of Economic Research, Inc.
- Lewis, Philip E T & MacDonald, Garry, 2002. "The Elasticity of Demand for Labour in Australia," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 18-30, March.
- Dean Parham, 2004. "Sources of Australia's Productivity Revival," The Economic Record, The Economic Society of Australia, vol. 80(249), pages 239-257, 06.
When requesting a correction, please mention this item's handle: RePEc:mlb:wpaper:1022. 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: (Katherine Perez)
If references are entirely missing, you can add them using this form.