Abstract
This paper analyzes wage elasticities using a panel dataset of 2800 large Belgian firms over the period 1987-1994. We explore various functional forms and find that the short-run wage elasticity varies between -0.37 and -0.65, while the long-run elasticity is robustly estimated to be larger than 1 in absolute value. These results are striking for they are much higher than those reported in previous studies using macroeconomic time-series data. This suggests that labour costs are more important in determining the demand for labour than initially was believed.
| Original language | English |
|---|---|
| Pages (from-to) | 229-241 |
| Number of pages | 13 |
| Journal | Economist |
| Volume | 145 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - Jan 1 1997 |
Keywords
- Jobs
- Labour demand
- Wage elasticities
- Wages
ASJC Scopus subject areas
- Economics and Econometrics
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Konings, J., & Roodhooft, F. (1997). How elastic is the demand for labour in Belgian enterprises? Results from firm level accounts data, 1987-1994. Economist, 145(2), 229-241. https://doi.org/10.1023/A:1002994205321