THE THEORY AND MEASUREMENT OF LABOUR HOARDING: A COMMENT1
| DOI | http://doi.org/10.1111/j.1467-9485.1979.tb00543.x |
| Author | Jim Taylor |
| Date | 01 June 1979 |
| Published date | 01 June 1979 |
Scottish
Journal
of
Political
Economy,
Vol.
26,
No.
1,
February
1979
THE THEORY AND MEASUREMENT OF
LABOUR HOARDING: A COMMENT‘
JIM
TAYLOR
University
of
hcaster
In a recent paper in this
Journal,
Leslie and Laing (1978) set out to critic-
ally appraise the measurement and theory of labour hoarding. Their paper
is in two distinct parts: the first part examines the concept and measurement
of labour hoarding as contained in Taylor (1972, 1974); the second part is
a general survey of the theory of labour hoarding. The following comments
are restricted to the first section of their paper. They were prompted by the
fact that Leslie and Laing have clearly misunderstood the meaning
of
labour
hoarding as defined and measured in Taylor (1972, 1974, 1976).
The first criticism made by Leslie and Laing is that “Taylor’s theory is
inconsistent
with
his
method of estimating labour hoarding”. They correctly
point out that
a
unique cost-minimizing combination of workers and hours
does not exist given the assumption of constant returns to labour and a cost
function of the form specified in Taylor (1974). They also point out that “it
should be possible with a suitable modification of his cost assumption to
resuscitate the theory”. Again they are correct, as can
be
seen from Taylor
(1976), which they appear to have ignored. Briefly, the revised cost function
contains a fixed cost element in labour costs which turns out to be more
suitable.
Their second criticism is inappropriate for the same reason as the first.
They say that “Taylor assumes that the first impact of adjustment is through
the elimination of overtime working”. They correctly point out that “Even
at the height of post-war slumps a substantial amount
of
overtime is worked
and far exceeds the amount of short-time working”. It was exactly for this
reason that Taylor (1976) explicitly allows for the possibility that the average
workweek exceeds the normal workweek during recessions (see Fig. 8.1,
p. 151 in Taylor (1976)).
Their third criticism is directed towards the meaning
I
attached to the
term “labour hoarding”. If they are relying for guidance on their Fig.
1,
which they claim to have copied from Taylor (1974), it is not surprising that
they have had problems in deciding “just what Taylor’s estimates mean”.
Their confusion undoubtedly stems from the fact that they have failed to
copy the figure accurately (and in particular their division of hoarding into
My thanks
to
Harvey Armstrong,
Bob
Hart,
John King and John Mangan for helpful
Comments. The remaining errors
are
my
own
responsibility.
Date
of
receipt of final manuscript:
3
October 1978.
191
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