Models of Labour Services and Estimates of Total Factor Productivity

Robert Dixon and David Shepherd

No 981, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: This paper examines the manner in which labour services are modelled in the aggregate production function, concentrating on the relationship between numbers employed and average hours worked. It argues that numbers employed and hours worked are not perfect substitutes and that conventional estimates of total factor productivity which, by using total hours worked as the measure of labour services, assume they are perfect substitutes, will be biased when there are marked changes in average hours worked. The relevance of the theoretical argument is illustrated using data for the United States and the United Kingdom.

Keywords: Labour Services; Production Function; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: E23 O4 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2007
New Economics Papers: this item is included in nep-eff and nep-mac
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Related works:
Journal Article: Models of labour services and estimates of total factor productivity (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:981

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