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The Sensitivity of Labor Demand Functions to Choice of Dependent Variable


  • George J. Borjas


This paper investigates whether the parameters of labor demand functions are sensitive to alternative methods of estimation. The assumption that the production technology is of the Generalized Leontief type implies that the demand system can be estimated by analyzing cross-section differences in earnings across labor markets, by studying longitudinal changes in earnings within a labor market, or by investigating cross-section differences in labor force participation rates across labor markets. The estimation of these models on the 1970 and 1980 Public Use Samples from the U.S. Census reveals that the estimates of labor demand functions are indeed quite robust to major specification changes.

Suggested Citation

  • George J. Borjas, 1985. "The Sensitivity of Labor Demand Functions to Choice of Dependent Variable," NBER Working Papers 1624, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:1624
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    References listed on IDEAS

    1. Mark C. Berger, 1983. "Changes in Labor Force Composition and Male Earnings: A Production Approach," Journal of Human Resources, University of Wisconsin Press, vol. 18(2), pages 177-196.
    2. Borjas, George J, 1983. "The Substitutability of Black, Hispanic, and White Labor," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 93-106, January.
    3. Hicks, John, 1970. "Elasticity of Substitution Again: Substitutes and Complements," Oxford Economic Papers, Oxford University Press, vol. 22(3), pages 289-296, November.
    4. Richard B. Freeman, 1979. "The Effect of Demographic Factors on Age-Earnings Profiles," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 289-318.
    5. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
    6. Sato, Ryuzo & Koizumi, Tetsunori, 1973. "On the Elasticities of Substitution and Complementarity," Oxford Economic Papers, Oxford University Press, vol. 25(1), pages 44-56, March.
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    Cited by:

    1. Francine D. Blau & Lawrence M. Kahn, 2006. "The U.S. Gender Pay Gap in the 1990S: Slowing Convergence," ILR Review, Cornell University, ILR School, vol. 60(1), pages 45-66, October.
    2. George J. Borjas & Stephen J. Trejo, 1991. "Immigrant Participation in the Welfare System," ILR Review, Cornell University, ILR School, vol. 44(2), pages 195-211, January.
    3. Teresa Ghilarducci & Michael Papadopoulos & Siavash Radpour, 2017. "Relative Wages in Aging America: The Baby Boomer Effect," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2017-03, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    4. Paul S. Davies & Michael J. Greenwood & Gary L. Hunt & Ulrich Kohli & Marta Tienda, 2012. "The local US labour market impacts of low-skilled migration from Mexico," Chapters,in: Migration Impact Assessment, chapter 2, pages 65-106 Edward Elgar Publishing.
    5. Parello, Carmelo Pierpaolo, 2012. "Indeterminacy in a dynamic small open economy with international migration," MPRA Paper 40013, University Library of Munich, Germany.
    6. Dekkers, G.J.M., 1994. "Intergenerational redistribution of income through additional pension schemes," WORC Paper 94.02.011/2, Tilburg University, Work and Organization Research Centre.
    7. Bodvarsson, Orn B. & Sessions, John G., 2011. "The measurement of pay discrimination between job assignments," Labour Economics, Elsevier, vol. 18(3), pages 297-309, June.
    8. Willi Leibfritz & Paul O'Brien & Jean-Christophe Dumont, 2003. "Effects of Immigration on Labour Markets and Government Budgets - An Overview," CESifo Working Paper Series 874, CESifo Group Munich.
    9. van Soest, A.H.O., 1990. "Essays on micro-econometric models of consumer demand and the labour market," Other publications TiSEM be045d62-a73d-4d7c-a591-f, Tilburg University, School of Economics and Management.

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