We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
A DYNAMIC MODEL OF THE DEMAND FOR LABOUR SERVICES.
- Authors
Latham, R. W.; Peel, D. A.
- Abstract
Empirical studies, in which the number of workers (N) and average hours worked per worker (H) have been treated as separate variables in the production function, appear to show that their respective output elasticities ( &b.eta;N and &b.eta;H) are different. Several explanations have been advanced. For example, scholars M.S. Feldstein and R. Craine have argued that this observation may be due to some portion of H being a fixed labor cost, devoted to coffee breaks, setting-up time and/or average hours in excess of some normal level, H being paid an overtime premium. Both observations are, of course, static assumptions and it will become evident below that neither are necessary in order to obtain the above result. This paper examines the behaviour of a net present value maximizing firm which incurs costs whenever it adjusts the number of its employees, that is N a quasi-fixed factor. The costs of adjustment refer to expenses which arise from search, training, hiring and firing and the existence of a personnel office. This paper has attempted to provide an alternative explanation of the empirical result &b.eta;N >1 > &b.eta;H.
- Subjects
EMPLOYEES; LABOR service; LABOR demand; WORKING hours; MATHEMATICAL variables; LABOR costs; BUSINESS enterprises; TRAINING; INDUSTRIAL costs
- Publication
Bulletin of Economic Research, 1979, Vol 31, Issue 1, p24
- ISSN
0307-3378
- Publication type
Article
- DOI
10.1111/j.1467-8586.1979.tb00136.x