The aim of this paper is to discuss the efficiency consequences of labor market rigidities. First, we estimate a production function that takes into account the duality of the Spanish labor market. We consider two types of labor input depending on the magnitude of the dismissal costs: a dynamic input determined by permanent contract workers and a variable, non dynamic input determined by fixed-...

This paper develops a growth model aimed at understanding the potential effects of globalization of production on rate of innovation, distribution of skilled labor income between the North and South, and welfare of skilled workers in both regions. We adopt a dynamic general equilibrium productcycle model, assuming that the North specializes in innovation and the South specializes in imitation. ...

We estimate a semiparametric dynamic panel data model by the local linear kernel method and we interpret the slope of the nonparametric component function as a varying slope coefficient. Thus, the slope coefficient is a smooth, but otherwise unknown, function of some of the regressors. A Monte Carlo experiment is reported to examine the finite sample performance of the local linear estimator. W...

A formalization of the Coase-Williamson-Cheung theory of the firm is used to examine the trade-off between the firm and the market as institutions for organizing production in a dynamic, general equilibrium model with increasing returns to labor specialization. The model considers the interaction of internal and external transaction costs and the gains to labor specialization in determining imp...

The correlation between female labor force participation rate (FPR) and total fertility rate (TFR) across developed countries has switched from negative to positive. This paper provides a structural explanation of the historical pattern via changes in substitutability between mother’s direct childcare and indirect market care. Analysis of a life-cycle model of married women’s labor supply and f...

BACKGROUND Patient characteristics may contribute to the progress and pain of labor. Quantitative evaluation of the effects of patient characteristics requires robust mathematical models of labor progress and labor pain. METHODS The authors retrospectively studied 100 sequential deliveries from each of five self-reported ethnic groups (Asian, Black, Hispanic, Other, and White). Demographic va...

I develop a two-period stochastic dynamic programming model to explain the interaction between fertilizer use and off-farm labor supply. I use a well-known sample of farmers in the semi-arid tropics of India to test the model. I find that fertilizer use responds strongly to wages in the village labor market and that irrigation raises fertilizer use, while larger farmers use less fertilizer than...

Firm Market Power and the Earnings Distribution Using linked employer-employee data, I compute firm-level measures of the labor supply elasticity facing each private non-farm firm in the US. I provide the first direct evidence of the positive relationship between a firm's labor supply elasticity and the earnings of its workers. I also contrast the dynamic model method employed by this paper wit...

A key prediction of dynamic labor demand models is that firing restrictions attenuate firms' employment responses to economic fluctuations. We provide the first direct test of this prediction using data from India. We exploit the fact that rainfall fluctuations, through their effects on agricultural productivity, generate variation in local demand within districts over time. Consistent with the...

Euler-equation methods for solving nonlinear dynamic models involve parameterizing some policy functions. We argue that in the typical macroeconomic model with valuable leisure, labor function is particularly convenient for parameterizing. This is because under the labor-function parameterization, the intratemporal first-order condition admits a closed-form solution, while under other parameter...