Short-term employment functions and the quasi-fixity of labour: A note

“…The empirical evidence indicates that fixed employment costs are higher in the primary sector. 4 Looking at job characteristics, the degree of fixity is higher for male, non-manual and non-production workers (Morgan, 1980;Smyth, 1985). From the industry point of view, fixed costs constitute a relevant proportion of total labour costs but present wide inter-and within-industry differentials.…”

Section: Fixed Employment Costs and Dual Labour Marketsmentioning

confidence: 99%

Efficiency Wage, Fixed Employment Costs, and Dual Labour Markets

Pisauro

2000

Labour

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The standard efficiency wage-based explanation of labour market dualism hinges on the existence of differences in monitoring across sectors. The paper proposes fixed employment costs as an alternative source of wage differentials for homogeneous workers. It shows that firms with larger fixed costs pay higher wages in order to elicit more effort from their workers, and tend to have higher capital/labour ratio and labour productivity. The model generates both involuntary unemployment and involuntary confinement in the secondary sector: high effort–high wage jobs are preferred to low effort–low wage jobs and either are preferred to unemployment. The proposed framework can also account for the various types of treatment of marginal jobs in primary sector firms envisaged by Doeringer and Piore (Internal Labour Markets and Manpower Analysis, 1971). In particular, an increase in fixed costs beyond a certain level may induce primary sector firms to restructure, segment production, and enter the secondary sector, thus converting their jobs into secondary jobs. From a welfare point of view, we cannot state in general the desirability of subsidizing fixed employment costs; however, we show that an employment subsidy financed by a wage tax is able to increase employment with no loss in terms of production

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“…Some of these have been undertaken for developed countries e.g., [8,30,32] . The way [2,3,[12][13][14]17,26,28] provide no support or only weak support for a negative value of the elasticity of employment demand with respect to wage rate in industries. Some others undertaken in the context of developing countries e.g., [1,9,21,25] but in general, not found empirical support for a negative value of the elasticity of employment demand with respect to wage rate in manufacturing industries.…”

Section: Introductionmentioning

confidence: 99%

“…In addition, the short-run influence of expenditure upon production, employment, hours worked, labor productivity and unemployment have received comparatively little attention. The implications of Oi's hypothesis is examined by [26] with the use of a short-term employment function. The restriction of the employment demand to follow either Cobb-Douglas or the generalized Leontief form gives insignificant wage elasticity but significant employment demand elasticity studied by [17] .…”

Section: Introductionmentioning

confidence: 99%

Short-Run Employment Functions in Manufacturing Industries

Baten¹,

Chowdhury²,

Kamil³

et al. 2009

J. of Social Sciences

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Problem statement: Increasing growth of population and shortage of producing capacity in Bangladesh have caused serious unemployment crisis and has forced the authorities to look for ways to reduce unemployment rate. Due to difference of structure and technology used in economic sectors and activities, the effects of factors on employment are different. So, for the purpose of findings alternatives to reduce unemployment rate in Bangladesh, it is necessary to estimate employment functions in all sectors and activities, analyze the most important factors and variables on these functions. Approach: In this study an attempt had been made to estimate short-run employment functions in manufacturing industries of Bangladesh, which are one of the most important sectors that has formed meaningful percent of country employment and gross national production. Adjustment of employment to its desired level and short run returns to employment had been explored in this study. Results: The model type I in comparison to the model type II of the relationship between value added and employment, which had been found to fit quiet well in Bangladesh manufacturing industries. The results showed that 1% increase in gross value added leads to 0.379% increase in employment. The coefficient of lagged employment is positive, indicated that the level of previous years employment increases the present year employment. Conclusion: The result also showed that the employment is negatively related to the real wage rate and the elasticity of employment with respect to real wage is about -0.251. The growth rate of value added exceeded the growth rate of employment in manufacturing industries in Bangladesh.

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Short-term employment functions and the quasi-fixity of labour: A note

Cited by 6 publications

References 7 publications

A Transatlantic Assessment of the Passing-on-Standing Matrix: A Reconciliation of Economic and Justice Approaches

A Transatlantic Assessment of the Passing-on-Standing Matrix: A Reconciliation of Economic and Justice Approaches

Efficiency Wage, Fixed Employment Costs, and Dual Labour Markets

Short-Run Employment Functions in Manufacturing Industries

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