Models of labour services and estimates of total factor productivity

Dixon, R. and Shepherd, D. 2010. Models of labour services and estimates of total factor productivity. Applied Economics. 42 (28), pp. 3629-3634.

TitleModels of labour services and estimates of total factor productivity
AuthorsDixon, R. and Shepherd, D.
Abstract

This article 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.

KeywordsLabour services, production function, total factor productivity
JournalApplied Economics
Journal citation42 (28), pp. 3629-3634
ISSN0003-6846
Year2010
PublisherTaylor & Francis
Digital Object Identifier (DOI)doi:10.1080/00036840802314549
Publication dates
Published2010
Place of publicationMelbourne, Australia
SeriesResearch paper
ISBN0734026390

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