000			02359cam a22003137 4500
001			w0309
003			NBER
005			20211020115515.0
006			m o d
007			cr cnu||||||||
008			210910s1979 mau fo 000 0 eng d
100	1		_aClark, Kim B.
245	1	0	_aHow Elastic is The Demand for Labor? / _cKim B. Clark, Richard B. Freeman.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c1979.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w0309
500			_a1979.
520	3		_aThis paper investigates the magnitude of the elasticity of demand for labor in time series data using more general and complete models of demand than have been previously employed. It argues that previous analyses have imposed two invalid constraints in calculations, which bias downward estimated elasticities. The first invalid constraint is the assumption that real capital prices have an equal opposite effect to real wages in the demand equation. We show on measurement error grounds that this constraint should not be imposed in econometric work even when long run homogeneity of prices correctly characterizes the market. The constraint is rejected in the data. The second invalid constraint is that all explanatory variables have the same lag distribution. We argue that this constraint is invalid when decisions are made under uncertainty and find that it is also rejected by the data. The principal positive empirical finding is that with the constraints relaxed, the elasticity, of demand with respect to real wages is much larger than the estimates in the literature, indicating much greater price responsiveness on the demand side of the labor market than has previously been thought.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
700	1		_aFreeman, Richard B.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w0309.
856	4	0	_uhttps://www.nber.org/papers/w0309
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w0309
942			_2ddc _cW-PAPER
999			_c348317 _d306879