Coûts unitaires et estimation d'un système de demande de travail: théorie et application au cas de Taiwan

Philippe De Vreyer

Annals of Economics and Statistics, 2000, issue 57, 211-238

Abstract: This paper deals with the required conditions for the use of average wages (unit labour costs) as estimates of the true wage levels, when one wishes to use least square methods to evaluate substitutions between heterogeneous labour categories. We show that such practice induces measurement error bias in the estimated equations and that an instrumental variable estimator can be used, but under very severe restrictions. A two-step method, inspired from Deaton [1987, 1988, 1990] and Crawford et al. [1996] is then proposed, that allows us to account for heterogeneity while making a minimum set of hypotheses. Illustration is then given using data from Taiwan. The results validate the proposed method of estimation and shed light on the functioning of the labour market, in a period during which large flows of young qualified workers entered the labour market and women increased their participation.

Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2000:i:57:p:211-238

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