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Full-Text Articles in Social and Behavioral Sciences
Would Cheaper Capital Replace Labour?, Alberto Behar
Would Cheaper Capital Replace Labour?, Alberto Behar
Alberto Behar
Left-leaning members of the ruling alliance should be careful what they wish for. By estimating elasticities of substitution and factor demand between capital and four labour types, we find micro-economic evidence that cheaper capital would reduce demand for labour. While capital and labour are substitutes, many but not all occupation types are themselves complements. These results allow for endogenous changes in output and apply to the vast majority of firms in our sample.
The Elasticity Of Substitution Between Skilled And Unskilled Labor In Developing Countries Is About 2, Alberto Behar
The Elasticity Of Substitution Between Skilled And Unskilled Labor In Developing Countries Is About 2, Alberto Behar
Alberto Behar
We develop a model of endogenous skill-biased technical change in developing countries. The model reconciles wildly dispersed existing estimates of the elasticity of substitution between more and less educated workers. It also produces an estimating equation for the elasticity, which allow us to produce overdue estimates for developing countries. With four types of data, elasticity estimates for developing countries are consistently about 2. In a skill-biased technical change framework, this estimate makes sense of what appears to be little or no correlation between relative skill supply and wage inequality.