What about Labor Demand ? A Reinterpretation of the Elasticity of Hours to Wages

Muriel Roger and Sébastien Roux ()

No 2004-44, Working Papers from Center for Research in Economics and Statistics

Abstract: The estimation of the elasticity of hours to wages relies mostly on laborsupply models although workers choices of hours may be constrained. This article reexaminesthe theoretical meaning of this elasticity accounting for labor demand. To do so, we introducepart-time work characteristics within an on-the-job equilibrium search model framework.Workers receive two types of labor contracts : one corresponding to full-time jobs, and theother to part-time jobs. Utility as a function of wages and the number of weekly workedhours is the criterion workers consider when accepting or rejecting job offers. A firm postspart and full-time job offers as a result of the trade-off between its production level, its wagecosts and the costs of hiring part- and full-time employees. We propose a representation ofthe production function that generates a specific demand for part-time jobs. We prove theexistence of a Nash equilibrium, in which all firms hire both part- and full-time workers.Moreover, after calibrating the structural search model using French individuals and firmsdata, we show that the relationship between hours and wages depends dramatically on thefirm's demand function parameter in this model.

Date: 2004
References: Add references at CitEc
Citations:

Downloads: (external link)
http://crest.science/RePEc/wpstorage/2004-44.pdf Crest working paper version (application/pdf)

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: https://EconPapers.repec.org/RePEc:crs:wpaper:2004-44

Access Statistics for this paper

More papers in Working Papers from Center for Research in Economics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Murielle Jules Maintainer-Email : murielle.jules@ensae.Fr.