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|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
Web page: http://www.economics.unimelb.edu.auEmail:
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.:
- 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.
- Kapteyn, A. & Kalwij, A. & Zaidi, A., 2000.
"The Myth of Worksharing,"
Economics Series Working Papers
9932, University of Oxford, Department of Economics.
- 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.
- Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
- repec:cup:cbooks:9780521571371 is not listed on IDEAS
- Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
- 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.
- Bill Russell & Warren J. Tease, 1988.
"Employment, Output and Real Wages,"
RBA Research Discussion Papers
rdp8806, Reserve Bank of Australia.
- 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.
- 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.
- Bell, David N F, 1982. "Labour Utilization and Statutory Non-Wage Costs," Economica, London School of Economics and Political Science, vol. 49(195), pages 335-43, August.
- 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.
- repec:dgr:kubcen:200023 is not listed on IDEAS
- Craine, Roger, 1973. "On the Service Flow from Labour," Review of Economic Studies, Wiley Blackwell, vol. 40(11), pages 39-46, January.
- Calmfors, Lars & Hoel, Michael, 1989. "Work Sharing, Employment and Shiftwork," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 758-73, October.
- Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
- 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 428-36, December.
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: (Aminata Doumbia)
If references are entirely missing, you can add them using this form.