The demand for labor and capital inputs in irish manufacturing-industries, 1953-1973

Abstract

Precis: Factor-demand functions are estimated, for two types of labour (wage-earners and salaried-workers) and capital, for 40 manufacturing industries. Two sets of elasticity results are reported. The first set implicitly assumes Hicks-neutral technical change. The second set by including a time trend as an additional explanatory variable, relaxes this constraint. The magnitudes of the elasticity estimates are greater for the specification which includes the time trend. In the latter case, for those estimates which fulfil certain a priori requirements, the average own-elasticity of demand with respect to the cost of wage-earners was estimated to be -0.28. The elasticity of substitution between wage-earners and capital was generally less than one and greater than the corresponding elasticity between salaried-workers and capital.