JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. University of Wisconsin Press andThe Board of Regents of the University of Wisconsin System are collaborating with JSTOR to digitize, preserve and extend access to The Journal of Human Resources. ABSTRACTA critical synthesis of the rapidly growing literature on substitution among labor force aggregates is presented. Despite the large number of studies now available, the only firm conclusions are: (1) Physical and human capital are complements and are jointly substitutable with raw labor. This has implications for policies that subsidize the wage costs of low-wage workers.(2) Young workers' own-wage elasticity of demand exceeds unity, but the degree to which they are substitutes for older workers is unclear. The paper suggests that future research should concentrate on substitution among workers disaggregated by age, education, or sex rather than by the bluecollar-white-collar distinction used in most work and that has little use in policy analysis.There has simultaneously been a recognition by economists analyzing labor market policy that empirical estimates of elasticities of substitution are essential for predicting the effects of policy changes. Tax credits for employment, such as that contained in the 1977 tax revisions, which subsidize a greater fraction of employment costs of low-wage workers, affect the employment of types of labor and also investment demand depending upon how substitutable these factors are. The targeted tax credits in the 1978 tax revisions explicitly subsidize only the wages of certain labor force groups. Investment tax credits decrease labor demand, assuming capital and labor are substitutes, but their effects on demand for some types of labor may be positive if capital is complementary with them in production. The extent of displacement of adult labor induced by a reduced minimum wage for youth depends on the substitution between youth and adult labor. The effect of a rise in the payroll tax base, such as in 1979, depends on the substitutability of high-and low-wage labor (unless the increase is shifted back fully to workers). Finally, the effects of a training program that converts low-to high-skilled labor will depend on how substitutable these are in production, for their substitutability will determine the extent of the change in their relative wages in the new, posttraining equilibrium.' (Interestingly, Johnson [26] assumes that the partial elasticity of substitution of high-for low-skilled labor is at least one, while Baily and Tobin [3] assume it is less than one.)In this essay we present a summary of the empirical literature on skill substitution. As Hamermesh [22] did for time-series studies of labor demand, we organize the literature to indi...

This paper examines labor market effects of increased labor force participation Of youths and women. Using 1969 cross-section data for manufacturing, substitution elasticities for pairs of inputs from agerace-sex aggregates of labor and c?pital are estimated. Findings include strong substitution between youths and white females, and complementarity between many of the remaining inputs. Then, allowing either rigid or flexible youth wages, a ten percent increase in white female participation is simulated. Findings are respectively: either a large decrease in youth employment and mode~ate wage decreases of other labor, or moderate decreases in wages of youths and white women.

This paper examines labor market effects of increased labor force participation Of youths and women. Using 1969 cross-section data for manufacturing, substitution elasticities for pairs of inputs from agerace-sex aggregates of labor and c?pital are estimated. Findings include strong substitution between youths and white females, and complementarity between many of the remaining inputs. Then, allowing either rigid or flexible youth wages, a ten percent increase in white female participation is simulated. Findings are respectively: either a large decrease in youth employment and mode~ate wage decreases of other labor, or moderate decreases in wages of youths and white women.

This article presents a simple long-run multijurisdictional neoclassical model that is used to simulate the incidence of a residential property tax in a semi-open metropolitan area. Housing is produced using capital and land, and households consume housing and a composite good Capital and the composite are in perfectly elastic supply. In the model, a fixed number of households sort themselves across 25 jurisdictions. First, a uniform tax is imposed in all jurisdictions. Next, the tax is raised in one single jurisdiction. The excise effects of raising the tax turn out to be surprisingly large. In the long run, a 25% increase in the tax rate only generates 6.6% more revenue for the taxing jurisdiction. Explicit excess burdens are calculated using the indirect utility approach.Despite years of discussion and analysis in the theoretical literature, we still do not understand much about the incidence of the property tax. Practically all discussions of the property tax begin with some reference to Mieszkowski's (1972) work. Using the general equilibrium approach of Harberger (1962), Mieszkowski showed that if a tax is imposed on all land and all capital at the same rate nationally, then capital owners and landowners bear the entire burden of the tax because there is no avenue of escape. This &dquo;new view,&dquo; elaborated in Aaron (1975), has stirred significant debate in the literature. A number of writers have shown that even if capital and land are in fixed supply, property taxes can alter the supplies of other factors with partial shifting as the result (Feldstein 1977;Calvo, Kotlikoff, and Rodriguez 1979). Others point out that