SPECIFICATION OF FACTOR DEMAND MODELS AND SHIFTWORKING*
| DOI | http://doi.org/10.1111/j.1467-9485.1981.tb00090.x |
| Published date | 01 November 1981 |
| Date | 01 November 1981 |
Scoirish
Journalof
Poiificd
Economy,
Vol.
28,
No.
3,
November 1981
0
1981
Longman
Group
Limited 003&9292/8
I
/00260256
S02.00
SPECIFICATION OF FACTOR DEMAND
MODELS AND SHIFTWORKING*
DEREK
L.
BOSWORTH
Louyhborough
University
I
INTRODUCTION
Models of the demands for factor services have evolved gradually as successive
authors have sought
to
improve one aspect
of
the model or another. In
particular, considerable attention has focused on the specification of the hours
submodel (Brechling, 1965; Ball and St. Cyr, 1966; Nadiri and Rosen, 1969;
Ehrenberg, 1971
;
Hart and Sharot, 1978). The early employment models
assumed that employment would be adjusted until hours of work reached a
point where the average labour cost per hour was lowest, although, in the
short-run, hours acted as a buffer whenever employment failed
to
reach its
long-run equilibrium position (Brechling, 1965
;
Ball and St. Cyr, 1966
;
Fair,
1969). The importance
of
hours
of
work in such models was increased when the
production function was generalised to allow for the separate inclusion of
hours
and employment (Feldstein, 1967; Craine, 1972). Later work further
generalised the model to allow the demands for hours and all other inputs to be
inter-related (Nadiri and Rosen, 1969). Clearly, each of these modifications
was an improvement in its own right, nevertheless, while all
of
the models
incorporate overtime working, none of them can be considered to be realistic
as they fail to incorporate shiftworking. The main thrust of this note, therefore,
is
that all factor demand models run the danger of fundamental misspecifi-
cation unless they account for the existence of shiftworking. The extent of the
misspecification depends on whether shiftworking implies
a
further tech-
nological constraint which is not accounted for in the traditional form of the
production function. In particular, this constraint is concerned with whether
capital and labour in some sense work independently within the firm or
whether capital must be manned while it is being operated.
If
this further
constraint is operative, then it gives rise to a respecification that results in a
substantially revised first order recursive system
of
equations of the Nadiri and
Rosen (1969) type. This new system also results in an hours submodel of a
general form, with the Ball and St. Cyr hours submodel as a special case.
*
I
would like to thank my colleagues at Loughborough University and Warwick University
for
their comments, as well as the staff
of
Paisley College and Strathclyde University
for
their
suggestions given during a seminar based on this paper. The errors contained in the paper are my
responsibility.
Date
of
receipt
of
final manuscript:
18
February
1981.
256
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