EconPapers    
Economics at your fingertips  
 

Flexibility of Firms' Labor Demand: Substitutability or Complementarity

Lutz Bellmann, Stefan Bender and Thorsten Schank ()
Additional contact information
Lutz Bellmann: Institute for Employment Research, Nürneberg
Stefan Bender: Institute for Employment Research, Nürneberg

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 1999, vol. 219, issue 1+2, pages 109-126

Abstract: Based on merged data from the IAB-establishment panel survey and the historic files of the employment statistics register, a translog cost system was estimated for six qualification groups (blue- and white-collar workers stratified into unskilled, skilled and highly skilled employees) for West German production industries for the year 1995. Substitution possibilities between differently qualified employees are investigated at the establishment level. The derived substitutional relationships within the blue-collar workers were very similar to those within the white collar workers. Skilled employees and, to a lesser extent, highly skilled employees are substitutes for the unskilled. This could at least partly explain the rise in unemployment amongst the unskilled. In contrast, the demand for skilled workers does not depend on the wage of the highly skilled employees and vice versa. The frequently cited results that the own-wage demand elasticity decreases with skill, can be confirmed between skilled and highly skilled employees, but not between skilled and unskilled employees. The elasticities of substitution between blue collar and white collar workers are relatively low; unskilled, skilled and highly skilled blue collar workers are found to be complements to the analogue group of white-collar workers. Finally, the evidence does not favor the capital-skill complementarity hypothesis.

Keywords: Demand for labor; labor costs; substitution; firm behavior (search for similar items in EconPapers)
JEL-codes: C31 J23 J31 D21 (search for similar items in EconPapers)
Date: 1999
References: Add references at CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.wiso-net.de/webcgi?START=A60&DOKV_DB=ZW ... 96520&DOKV_HS=0&PP=1 Main text (application/pdf)
http://search.ebscohost.com/login.aspx?direct=true ... 2771&site=ehost-live Main text (application/pdf)
Access via EBSCOhost Econlit - http://www.ebscohost.com/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:jns:jbstat:v:219:y:1999:i:1-2:p:109-126

Access Statistics for this article

More articles in Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) from Justus-Liebig University Giessen, Department of Statistics and Economics
Contact information at EDIRC.
Series data maintained by Peter Winker ().

 
Page updated 2014-08-11
Handle: RePEc:jns:jbstat:v:219:y:1999:i:1-2:p:109-126