Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/24362 
Year of Publication: 
2000
Series/Report no.: 
ZEW Discussion Papers No. 00-16
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
Abstract: 
This paper presents an application of the Generalised Error Correction Model (GECM) for heterogeneous factor demands based on the quadratic cost function. Using data for 26 West German manufacturing industries over the period 1976-1995, it turns out that less general specifications such as the partial adjustment and the static AR(1) model are rejected. Furthermore, both shortrun and long-run labour demands of different skill classes are inelastic. Unskilled labour is found to have a somewhat higher wage elasticity in absolute terms than medium-skilled labour. A small part of shift in demand away from unskilled labour can be explained by the substitutability relationship between intermediate materials and unskilled labour. Between 6 and 13 percent of the observed shift towards high-skilled labour can be explained by capital accumulation.
Subjects: 
heterogeneous labour demand
dynamics
price elasticities
JEL: 
J31
J21
E23
Document Type: 
Working Paper

Files in This Item:
File
Size
251.21 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.