Employment, schooling and productivity growth

Endogenizing technological progress: The MESEMET Model

“…Some of these parameters are guesstimates and subjected to sensitivity analysis. Empirical estimates for the Dutch elasticity of substitution between raw labour and human capital by Broer and Jansen (1989) and Hebbink (1991) confirm that (in comparison with aggregate labour and capital), raw labour and human capital are poor substitutes. Accordingly, we set the elasticity of substitution between raw labour and human capital at 0.55.…”

An empirical model for endogenous technology in the Netherlands

“…Few studies have attempted to obtain substitution elasticities between workers with differing educational attainments. Broer and Jansen (1989) analyse substitution elasticities between workers with three levels of education for the Netherlands; they find all categories to be very poor substitutes for each other, a substitution elasticity of 0.01 between both low and medium, and low and highly educated workers. However, a further study by Grant (1979) for the U.S. finds relatively high substitution possibilities between low and medium educated workers (a=0.77), and higher still between medium and highly educated workers (CT= 1.16).…”

Employment by level of education and production factor substitutability

“…Because of the two-level structure, this kind of function is sufficiently flexible to allow for different substitution patterns between the four production factors. A function with more than two levels, like in Broer and Jansen (1989), would increase the estimation model's complexity too much, and would add considerably to the problem of selecting the most appropriate specification. Hence, I stick to the two-level function, of which I consider two possible specifications.…”

“…The choice of sectors is mainly restricted by the limited availability of the physical capital and output data. For this reason the sectors agriculture, public utilities, construction, wholesale trade, banking, and other services 4,5,6,8,9) are not con- Gelauff et aL (1984), and Broer and Jansen (1989). Breakdown by education is preferable in analyses of policies that involve changing relative wage costs.…”

“…Empirical studies on macroeconomic demand for production factors in The Netherlands are usually based on time-series data (Gelauff et al, 1984;Broer and Jansen, 1989). The reliability of time-series estimates is limited, because time-series data on the distribution of the labour force in educational categories are not directly observed and have to be constructed.…”