How Comparable are Labor Demand Elasticities across Countries?
The authors present the first comparable dynamic panel estimates of labor demand elasticity, using data from Chile, Colombia, and Mexico. They examine the benefits, and limits of the Arellano, and Bond GMM in differences estimator, and the Blundell...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/08/1570688/comparable-labor-demand-elasticities-across-countries http://hdl.handle.net/10986/19565 |
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okr-10986-195652021-04-23T14:03:43Z How Comparable are Labor Demand Elasticities across Countries? Fajnzylber, Pablo Maloney, William F. ACCOUNTING ADJUSTMENT PROCESS AGGREGATE DEMAND BASE YEAR COMPETITIVENESS DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPING COUNTRIES DOWNWARD BIAS DYNAMIC PANEL ECONOMETRICS ECONOMIC STUDIES ECONOMIES OF SCALE ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL STUDIES EMPLOYMENT ENDOGENOUS VARIABLES EXPLANATORY VARIABLES HETEROSKEDASTICITY HUMAN CAPITAL JOB SECURITY LABOR DEMAND LABOR DEMAND FUNCTIONS LABOR MARKET LABOR MARKETS LAGGED CHANGES LAGGED DEPENDENT LDCS LEGISLATION LONG-RUN WAGE MEASUREMENT ERROR NEGATIVE CORRELATION POLICY RESEARCH POVERTY REDUCTION PRODUCT MARKETS PRODUCTION TECHNOLOGY PRODUCTIVITY RANDOM WALK RELATIVE LABOR RELATIVE PRICES RETURNS TO SCALE SERIAL CORRELATION SERIES DATA SIGNIFICANT CORRELATION SKILLED WORKERS THEORETICAL MODELS TIME SERIES TOTAL OUTPUT VALUE ADDED The authors present the first comparable dynamic panel estimates of labor demand elasticity, using data from Chile, Colombia, and Mexico. They examine the benefits, and limits of the Arellano, and Bond GMM in differences estimator, and the Blundell, and Bond GMM system estimator. They also explore the limitations of such measures for diagnosing flexibility in the labor market. Even accounting for the large variance induced by different estimation techniques, one probably cannot say much about the flexibility of different labor markets based on comparisons of the estimated elasticity of demand. Colombia, for example, which has severe restrictions on firing workers, has much higher long-run wage elasticity than Chile, which has no such restrictions. Three factors make such comparisons difficult: 1) Elasticity differ greatly across industries, so the composition of industry in each country probably affects the aggregate elasticity. Estimates are extremely dependent on the estimation approach, and specification. 2) Even for specific industries, the elasticity of labor demand differs greatly across countries. And the authors find no common pattern of country rankings across industries, which suggests that those differences cannot be attributed solely to systematic characteristics of the countries' labor markets. 3) Estimates for Chile over fifteen years, suggest substantial, and significant variations in elasticity over time. So comparisons across countries depend not only on the industries involved, but also on the sample periods of time used. Estimates change greatly, if not secularly, with sample period. 2014-08-21T17:33:22Z 2014-08-21T17:33:22Z 2001-08 http://documents.worldbank.org/curated/en/2001/08/1570688/comparable-labor-demand-elasticities-across-countries http://hdl.handle.net/10986/19565 English en_US Policy Research Working Paper;No. 2658 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Chile Colombia Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ADJUSTMENT PROCESS AGGREGATE DEMAND BASE YEAR COMPETITIVENESS DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPING COUNTRIES DOWNWARD BIAS DYNAMIC PANEL ECONOMETRICS ECONOMIC STUDIES ECONOMIES OF SCALE ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL STUDIES EMPLOYMENT ENDOGENOUS VARIABLES EXPLANATORY VARIABLES HETEROSKEDASTICITY HUMAN CAPITAL JOB SECURITY LABOR DEMAND LABOR DEMAND FUNCTIONS LABOR MARKET LABOR MARKETS LAGGED CHANGES LAGGED DEPENDENT LDCS LEGISLATION LONG-RUN WAGE MEASUREMENT ERROR NEGATIVE CORRELATION POLICY RESEARCH POVERTY REDUCTION PRODUCT MARKETS PRODUCTION TECHNOLOGY PRODUCTIVITY RANDOM WALK RELATIVE LABOR RELATIVE PRICES RETURNS TO SCALE SERIAL CORRELATION SERIES DATA SIGNIFICANT CORRELATION SKILLED WORKERS THEORETICAL MODELS TIME SERIES TOTAL OUTPUT VALUE ADDED |
| spellingShingle |
ACCOUNTING ADJUSTMENT PROCESS AGGREGATE DEMAND BASE YEAR COMPETITIVENESS DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPING COUNTRIES DOWNWARD BIAS DYNAMIC PANEL ECONOMETRICS ECONOMIC STUDIES ECONOMIES OF SCALE ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL STUDIES EMPLOYMENT ENDOGENOUS VARIABLES EXPLANATORY VARIABLES HETEROSKEDASTICITY HUMAN CAPITAL JOB SECURITY LABOR DEMAND LABOR DEMAND FUNCTIONS LABOR MARKET LABOR MARKETS LAGGED CHANGES LAGGED DEPENDENT LDCS LEGISLATION LONG-RUN WAGE MEASUREMENT ERROR NEGATIVE CORRELATION POLICY RESEARCH POVERTY REDUCTION PRODUCT MARKETS PRODUCTION TECHNOLOGY PRODUCTIVITY RANDOM WALK RELATIVE LABOR RELATIVE PRICES RETURNS TO SCALE SERIAL CORRELATION SERIES DATA SIGNIFICANT CORRELATION SKILLED WORKERS THEORETICAL MODELS TIME SERIES TOTAL OUTPUT VALUE ADDED Fajnzylber, Pablo Maloney, William F. How Comparable are Labor Demand Elasticities across Countries? |
| geographic_facet |
Latin America & Caribbean Chile Colombia Mexico |
| relation |
Policy Research Working Paper;No. 2658 |
| description |
The authors present the first comparable
dynamic panel estimates of labor demand elasticity, using
data from Chile, Colombia, and Mexico. They examine the
benefits, and limits of the Arellano, and Bond GMM in
differences estimator, and the Blundell, and Bond GMM system
estimator. They also explore the limitations of such
measures for diagnosing flexibility in the labor market.
Even accounting for the large variance induced by different
estimation techniques, one probably cannot say much about
the flexibility of different labor markets based on
comparisons of the estimated elasticity of demand. Colombia,
for example, which has severe restrictions on firing
workers, has much higher long-run wage elasticity than
Chile, which has no such restrictions. Three factors make
such comparisons difficult: 1) Elasticity differ greatly
across industries, so the composition of industry in each
country probably affects the aggregate elasticity. Estimates
are extremely dependent on the estimation approach, and
specification. 2) Even for specific industries, the
elasticity of labor demand differs greatly across countries.
And the authors find no common pattern of country rankings
across industries, which suggests that those differences
cannot be attributed solely to systematic characteristics of
the countries' labor markets. 3) Estimates for Chile
over fifteen years, suggest substantial, and significant
variations in elasticity over time. So comparisons across
countries depend not only on the industries involved, but
also on the sample periods of time used. Estimates change
greatly, if not secularly, with sample period. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Fajnzylber, Pablo Maloney, William F. |
| author_facet |
Fajnzylber, Pablo Maloney, William F. |
| author_sort |
Fajnzylber, Pablo |
| title |
How Comparable are Labor Demand Elasticities across Countries? |
| title_short |
How Comparable are Labor Demand Elasticities across Countries? |
| title_full |
How Comparable are Labor Demand Elasticities across Countries? |
| title_fullStr |
How Comparable are Labor Demand Elasticities across Countries? |
| title_full_unstemmed |
How Comparable are Labor Demand Elasticities across Countries? |
| title_sort |
how comparable are labor demand elasticities across countries? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/08/1570688/comparable-labor-demand-elasticities-across-countries http://hdl.handle.net/10986/19565 |
| _version_ |
1764440023918182400 |