oligopolistic models of investment and employment decisions in a regional context the purpose of this paper is to analyse and estimate employment and investment functions derived from a model of an imperfectly competitive firm with a putty clay technology in which both the level and the spatial allocation of factors of production are determined it will be shown that in general while for a given region the choice of technique is a function of factor prices of that region alone the optimal level of production depends upon a comparison of cost conditions across different regions in estimating the investment and employment function attention is paid to the appropriate way of modelling expected output the empirical application is based on data for southern italy disaggregated by industrial sectors using a fixed effect time series cross section model

miners wages in post war britain an application of a model of trade union behavior the paper studies the determination of wages in the british coal industry a utility maximising model of a trade union is used to represent the behaviour of the national union of mineworkers a non linear structural model is derived and is estimated by full information maximum likelihood the results are quite encouraging there is support for a neo classical demand curve for miners labour and a significant estimate of workers relative risk aversion

the problem of market bias in modern capitalist economies modern societies are presently facing a number of challenging and often contentious issues regarding how to organize and govern a variety of activities that employ a substantial and growing fraction of their resources in certain cases to make market organization work satisfactorily will require strong and fine grained regulation and perhaps a number of other supplementary non market elements for other activities it would be best to rely centrally on other basic organizational modes with markets in an ancillary role in these latter cases too strong an adherence to a belief in the general efficacy of simple market organization can hinder the achievement of a satisfactory solution the central purpose of this essay is to call attention to the complexity and variegation of the sectoral or activityspecific governing structures employed by modern capitalist economies and to argue that such structures need to be tailored to the details of the activities involved copyright 2002 oxford university press

matching bias in labor demand estimation abstract using a matched firm worker dataset we show both theoretically and empirically that positive assortative matching between firms and workers leads to an underestimation of the absolute value of wage elasticity of labor demand

compositional change aggregation and dynamic factor demand estimates on a panel of manufacturing firms most empirical research on investment and dynamic factor demand has used aggregated data the large number of authors who have cited this as a source of problems strongly suggests possible benefits from analyzing individual firm data this paper presents an analysis of a panel dataset of us manufacturing firms several models based on cost minimization and a three factor cobb douglas technology are developed the differences concern whether the technology varies across two digit sic industries the presence of fixed adjustment lags and the determinants of adjustment costs identification relies on the rational expectations hypothesis and estimation on non linear 3sls the estimates indicate that versions with the adjustment lag perform better than others conditional elasticities reveal that factor demand responds rapidly to anticipated changes in output and factor prices a finding consistent with other recent work it appears that the factor demand of large firms is more price sensitive and less sensitive to output than small firms consistent with recent work on credit market imperfections comparison of the results based on the pooled and the industry varying technologies indicate that the use of aggregate data is indeed a source of problems

real wages and the demand for skilled and unskilled male labour in ghana s manufacturing sector 1991 1995 abstract real wage rates in ghana have fallen substantially over the last 20 years in this paper survey data for the years 1991 1995 is used to assess the changes which have occurred in the 1990s it is shown that the real wage rate for the unskilled has continued to fall factor share equations for skilled and unskilled labour are estimated which show the rise in skilled wages leading to substitution to unskilled labour but no rise in the share of skilled labour in income the own price elasticities of skilled and unskilled labour are estimated at 0 44 and 0 52 respectively

the price responsiveness of the 1demand for labour by skill british mechanical engineering 1963 1978 it is commonplace in labour economics that employment changes in response to exogenous shifts in wages and aggregate demand depend among other factors on the degree of skill since the pioneering work of oi i962 and rosen i968 little work has been done in investigating this issue in the british context and this paper will attempt to remedy this deficiency we estimate a singular dynamic three skill labour demand system using time series data for british mechanical engineering we then calculate substitution wage and output elasticities for the demand for each kind of labour in such an analysis we must decide on two issues first the specification of technology second the modelling of dynamics in tackling the first issue we rely on the theory of duality samuelson i947 shephard i953 diewert i97i in choosing a model based on the cost function a cost function approach is advantageous for the following reasons first shephard s lemma allows us to move conveniently from any cost function to the cost minimising factor demands that underlie it second the cost function has factor prices as explanatory variables which may be regarded as exogenous at the industry level third the elasticities we seek to estimate are linear functions of the parameter estimates fourth the cost function is homogeneous of degree one in prices but this does not imply constant returns to scale see binswanger i974a the use of a cost function approach permits fewer constraints to be imposed on the production process in choosing the functional form we follow binswanger i974 a b berndt and wood i975 kesselman et al i977 and layard i983 in estimating the translog cost function which was first proposed by christensen et al i97i the generality of this functional form lies first in placing no apriori restrictions on the elasticities of substitution and second in that it may be regarded as a secondorder taylor series approximation to any arbitrary cost function near the equilibrium the factor demand system derived from the translog cost function is static and holds only in equilibrium however the existence of convex adjustments costs and of imperfections involved in obtaining information imply that there is some delay in adjusting employment to its desired level following exogenous wage and

the effects of inflation and real wages on employment this paper considers the effects of inflation on employment the absence of index linked loans and the possibility that errors are committed in times of inflation lead to a higher probability of bankruptcy during inflation if firms care about bankruptcy this implies a lower level of employment empirical results confirming this are presented and suggest that higher inflation has substantially contributed to the fall in employment in the united kingdom the authors also demonstrate that a negative real wage elasticity is not robust to changes in specification copyright 1987 by the review of economic studies limited

imposing local concavity in the translog and generalized leontief cost functions abstract we propose and illustrate a method for imposing concavity at a single point which may result in concavity at many points in the familiar translog and generalized leontief cost functions while at the same time maintaining flexibility of the forms

modelling labour market adjustment to trade liberalisation in an industrialising economy this paper investigates labour market responses to trade liberalisation in an industrialising country short and long run responses of employment and wages are examined using a specific factor trade model which underpins the empirical work employment and wage equations are estimated using dynamic panel techniques for importable and exportable sectors in mauritius and for a period covering both the pre and post liberalisation regimes the empirical testing finds some support for the theoretical predictions of differential responses between sectors increases in female participation however appear to have dampened the adjustment burdens of liberalisation on importables there is relatively little evidence available about the effects of trade induced shifts in the composition of demand on inter industry employment and wage levels in developing countries analyses of the factor content of imports and exports suggest that a shift from import substitution is to export promotion ep policies will typically in the case of a developing country expand the more labour intensive industries increase labour demand overall and drive up real wages in the long run but trade liberalisation and increased foreign competition may not only affect the composition of the tradeables goods sector i e the distribution between importables and exportables they may also affect both the efficiency with which all firms use factors including labour and the distribution of output within a sector between more and less efficient firms thus the net long run effects of trade liberalisation on employment will depend upon the balance of structural and efficiency effects which cannot be identified from analyses of the composition of trade alone further we must also recognise that the short and long run effects of trade liberalisation on employment and wages may diverge the divergence depending on the degree of factor mobility and the competitiveness of labour markets the aim of this paper is to model labour market adjustment to trade liberalisation in an industrialisingz country it will do so using panel data evidence for mauritius an economy that has undergone significant trade liberalisation and transformation during the 1980s indeed mauritius is viewed simultaneously as a successful liberaliser and an economy with extensive government intervention in the labour market it provides a valuable test base

union work rules and efficiency in the building trades this paper estimates the effect of union work rules in the building trades on employment and costs by comparing factor demand elasticities for union and nonunion contractors and subcontractors over micro data from two different types of construction the results show that the elasticities of substitution between labor and nonlabor inputs and own price elasticities for nonlabor inputs are about the same for union and nonunion contractors in contrast the elasticities of substitution among different skill categories of labor and the own price elasticities for each category are much lower under unionism

trade with low wage economies employment and productivity in uk manufacturing the pattern of uk employment has been significantly transformed over the last two decades strengthening the services base of the economy but in the process imposing significant adjustment pressures on many groups in the labour force the manufacturing sector has experienced large scale job losses of the 7 26 million jobs in the sector in 1979 some 2 8 million or 40 had disappeared by 1992 the impact on some regions and groups of workers has been severe unskilled workers especially found it difficult to obtain re employment and their relative earnings have declined during this period unemployment levels increased rapidly peaking at 3 1 million in 1983 but remaining at over 2 million for much of the subsequent period these developments have been driven by a number of factors both national and internationial technological advance and institutional change have certainly been major factors a key concern addressed in this paper has also been the role played by the rapid growth of import competition from low wage economies to the extent that low wage competition shifts uk consumption from domestically manufactured to imported goods jobs in uk manufacturing will be lost whilst this should eventually lead to a redeployment and more productive use of uk labour it generates at least transitional unemployment moreover the displacement effect will have knock on multiplier effects on upstream industries that supply intermediate products and on business services which are used by the import competing industry greenhalgh 1994 employment in import competing sectors could further be affected as uk firms seek to defend their market position by improving x efficiency and speeding up technological innovation the consequent productivity gains while making jobs more secure in the longer term might generate additional job losses in the short term by enabling firms to maintain output with fewer workers the adjustment costs associated with these changes will depend on the flexibility of labour markets of course adjustment and change are normal features of a modern market economy and there are offsetting general equilibrium effects but there could still be concern that the scale and speed of rising competition from developing countries imposes excessive short term adjustment costs on owners of resources in uk manufacturing or at least that this might provoke a protectionist backlash thatjeopardises progress towards a more open uk economy

an econometric analysis of changes in the cost and production structure of the trucking industry 1953 1982 a cost function is estimated using a time series cross section database for the trucking industry covering the time period from 1953 through 1982 i e after the implementation of the motor carrier act of 1980 which essentially deregulated the industry two conclusions emerge first similarities between early periods of regulation and deregulation are greater than between early and late periods of regulation second a comparison of the regulated and deregulated cost functions indicates that the heaviest burden of regulation was borne by those firms which faced the highest costs copyright 1988 by mit press

interrelated factor demands from dynamic cost functions an application to the non energy business sector of the uk economy in this paper we propose a dynamic cost function which allows us consistently to derive a set of dynamic interrelated factor demand equations in the general error correction form introduced by anderson and blundell 1982 this paper expands results recently published in urga 1996 it shows that the derivation of an effective underlying cost function allows us to identify the full set of parameters of the underlying process this does not happen in the standard anderson blundell formulation we report an empirical exercise used to model the so called supply side of the london busines school large scale economic model where we estimate both the set of factor demands and the underlying dynamic cost function for the non energy business sector of the uk economy

reducing government debt in the presence of inequality abstract what are the welfare effects of government debt in particular what are the welfare consequences of government debt reductions we answer these questions with the help of an incomplete markets economy with production households are subject to uninsurable income shocks we make several contributions first by targeting the skewed wealth and earnings distribution of the us economy in our calibration we identify inequality as the major driver of the welfare effects of public debt gdp changes second we show that in order to fully gauge the welfare consequences and the political feasibility of government debt changes it is crucial to consider the transitional dynamics between stationary equilibria our results therefore have important implications for the design of debt reduction policies since the skewed wealth distribution generates a large fraction of borrowing constrained households a public debt reduction should be non linear such that the tax burden is postponed into the future

factor demands adjustment costs and regulation received theory regarding the economic efficiency of public utilities suggests that regulation may result in a distortion of the economic ratio of input usage such a distortion would result in allocative inefficiency and possibly a scale inefficiency this occurs as the regulating agency often imposes a rate of return limitation on the utility which is calculated against a rate base which in turn is generally some measure of capital stock the regulated utility may overinvest in the rate base stock to assure achievement of the maximum net present value of profits see averch and johnson 1962 baumol and klevorick 1970 this overcapitalization results in a higher than allocatively efficient capital labour ratio and perhaps a change in output which may be associated with scale inefficiency these effects of regulation became known as the averch johnson effect me baumol and klevorick bk refined the concept when they suggested that two distinct interpretations of the aje were that 1 the capital labour ratio of the regulated firm will be larger than that of the unconstrained profit maximizing monopolist or 2 the capital labour ratio of the regulated firm will be larger than the one that minimizes costs for the output level that the firm selects to produce the first interpretation compares the capital labour ratios regardless of the output level whereas the second requires that the comparison be made when the output level is constant fig 1 helps explain this difference a non regulated profit maximizing cost minimizing firm will operate at point a or a depending upon output the first interpretation suggests that when regulated the firm moves from point a to point b or to b bk showed that this interpretation cannot always be considered economically inefficient and it is thus not always true that the aje exists as a phenomenon of economic inefficiency the operation at b b under rate of return regulation has two characteristics of interest first while it is not total cost minimizing and hence allocatively inefficient it is profit maximizing within the limits of the rateof return regulation smithson 1978 second in order to test for the existence of the we we must examine how the firm behaves under constant or exogenously given output under regulation output can be considered exogenously set as the regulator sets the price calculated on the basis of allowed rate ofreturn and the market demand schedule in turn then determines output further as regulators require public utilities to meet all demand we can consider output to be exogenous

the own wage elasticity of labor demand a meta regression analysis firms labor demand responses to wage changes are of key interest in empirical research and policy analysis however despite extensive research estimates of labor demand elasticities remain subject to considerable heterogeneity in this paper we conduct a comprehensive meta regression analysis to re assess the empirical literature on labor demand elasticities building on 942 elasticity estimates from 105 different studies we identify sources of variation in the absolute value of this elasticity heterogeneity due to the theoretical and empirical specification of the labor demand model different datasets used or sectors and countries considered explains more than 80 of the variation in the estimates we further find substantial evidence for the presence of publication selection bias as estimates of the own wage elasticity of labor demand are upwardly inflated

on the estimation of factor substitution in the translog model the conventional approach to computation of the allen partial elasticities of substitution aes in the framewo rk of the translog production function requires to estimate a set of multivariate input demand functions this paper proposes an alternati ve way to compute the aess requiring only to estimate elasticities v ia a truncated single cost share equation value added separability and pairwise factor substitutabilities have both been validated under the nonlinear restriction the achievements of the alternative appro ach are by and large consistent with those of the conventional approa ch and with those in some of the existing studies copyright 1987 by mit press

employment and deadweight loss effects of observed nonwage labor costs i introduction nonwage labor costs consist of several mandated benefits health training accident housing plans as well as several taxes and are intended to increase workers welfare and job security however these benefits tend to come at the expense of reducing employment and deadweight losses to quantify these resulting effects one needs a reliable measure of the employment labor cost elasticity most studies conducted on this subject find low estimated values for this elasticity which contrasts with policy makers enthusiasm to reduce labor costs in this article using a peruvian matched firm workers data set we find that nonwage labor costs reduce employment measured in total hours of work by 17 for white collars and by 53 for blue collars with associated deadweight losses of 10 and 35 of total contributions revenues respectively we also compute employment losses of compliance with mandated employers and workers contributions of 4 for white collars and 12 for blue collars with respective associated deadweight losses of 2 and 6 of contribution revenues these results come from estimating the long run unconditional firm level labor demand function by a procedure that corrects for endogeneity of wages we show that unbiased estimates even using small units such as firm level data require not only that wages are exogenous but also that their unobserved determinants are uncorrelated with the unobserved determinants of labor demand this requirement is not fulfilled in the likely event pointed out by becker 1993 that larger firms are matched with more productive workers consequently an estimation that corrects for endogeneity yields a larger labor cost elasticity of labor demand than one that does not like ordinary least squares ols in the past two decades there has been intensive theoretical and empirical research on the effects of labor market frictions on job creation western european economies characterized by large job security provisions have been the center of attention of this research that has modeled these frictions as adjustment costs in labor demand bentolila and bertola 1990 hamermesh 1989 hopenhayn and rogerson 1993 nickell 1987 rendon 2004 this literature finds that the effects of eurosclerosis that is labor markets with high firing costs are ambiguous in good times sclerotic labor markets create fewer jobs than free labor markets however in bad times sclerotic labor markets reduce job destruction most of the research done in latin america has been done under these guidelines obtaining statistically significant negative effects of job security provisions on employment rates 1 furthermore using country level data for latin america and organization for economic cooperation and development countries heckman and pages serra 2000 found large effects of job security provisions on employment 2 which are robust to several specifications ols random and fixed effects the authors present their results as a strong evidence against freeman s 2000 view that job security regulations mostly affect distribution but not efficiency and advocate the substitution of job security provisions by other mechanisms that provide income security at lower efficiency and inequality costs under a classic labor demand framework and using worker and firm level data this article provides new evidence in the same direction extending the computation of the effects of job security provisions to deadweight losses hamermesh 1993 surveys several studies on the estimation of labor demand and remarks that estimates of the labor cost employment elasticity should be interpreted and compared cautiously depending on the specification adopted capital is an explanatory variable in a short run labor demand estimation it is not in a long run labor demand estimation similarly output is included in the estimation of a conditional labor demand but excluded in the estimation of an unconditional labor demand

the determination of wages employment and work hours in an economy with centralised wage setting sweden 1950 83 a key component of recent explanations for the growth in unemployme nt in western europe is a negative relation between wage rates and employment this paper examines the evidence for such a relationship for swedish manufacturing industry and also investigates the corresponding movements of hours of work the findings form the ingredients of a structural model of the labor market which is estimated using time series observations from 1951 t o 1983 the greater volatility of employment relative to earnings is measured by a specific parameter which in this model relates to the objectives of trade unions copyright 1988 by royal economic society

the impact of affirmative action on labor demand a test of some implications of the le chatelier principle this paper presents an alternative approach to measuring the impact of affirmative action on firms affirmative action is modeled as a series of hiring quotas if the quotas are binding then a firm subject to affirmative action will operate with greater costs of production have less elastic demand for inputs and be less able to substitute between most inputs the results are consistent with the hypothesis that affirmative action regulations significantly constrain firms behavior own wage elasticities are less elastic and most inputs are less substitutable for constrained firms further affirmative action raises costs by 6 5 percent for firms subject to the program copyright 1992 by mit press

economists views about parameters values and policies survey results in labor and public economics specialists in labor economics and public economics at 40 leading research universities provided opinions of policy proposals quantitative best estimates and 95 percent confidence intervals for economic parameters and answers to values questions regarding income redistribution efficiency versus equity and individual versus social responsibility their positions on policy are more closely related to their values than to their estimates of relevant economic parameters average best estimates of the economic parameters agree well with the relevant literature but individual best estimates are usually widely dispersed the individual 95 percent confidence intervals are much narrower than the substantial cross respondent variation in estimates would warrant

employment adjustment in uk manufacturing this analysis differs from previous studies of labor demand in its explicit inclusion of the costs to the firm of adju sting its workforce these costs include institutional factors such a s employment protection legislation and unions and market factors su ch as the degree of slack in the labor market two questions are addr essed what is the quantitative impact of these forces and does their inclusion improve the fit of a labor demand function the results sh owed these factors to have a strong influence on the rate of hiring f iring and to improve significantly on conventional labor demand funct ions copyright 1988 by royal economic society

a nonhomothetic generalized leontief cost function based on pooled data factor demand studies of komiya ozaki lau and tamura based upon detailed cross section data on individual production units have found that the nonhomothetic factor limitational nht fl demand system a nonhomothetic version of the leontief fixed coefficient model well explains the data these results however have mostly been ignored in the current literature on flexible functional forms and in fact none of the well known nonhomothetic flexible cost function forms includes the nht fl model i introduce a new nonhomothetic form of the generalized leontief gl cost function which includes the nht fl model as a special case empirical application to a pooled data set of the japanese iron steel industry indicates that his form is superior to the translog diewert wales gl and berndt khaled gl forms copyright 1990 by mit press

how robust is the capital skill complementarity hypothesis this paper investigates the relation between substitution possibilities in manufacturing production between capital and two labor inputs blue collar and white collar workers griliches found in 1969 that unskilled labor was more easily substituted for by capital than skilled labor griliches called this capital skill complementarity the capital skill complementarity hypothesis has implications for the aggregation of labor inputs as well as for employment of labor categories and income distribution between factors this paper investigates the robustness of the capital skill complementarity hypothesis on swedish data by varying model assumptions concerning economies of scale and technological growth copyright 1992 by mit press

cognitive and institutional perspectives of eco efficiency the paper sketches out a theoretical framework for analysing the interplay between eco efficiency cognition and institutions it derives from analytical shortfalls of the prevailing literature which features strongly engineering and business economics by using insights from new institutional economics from cognitive science and partly from evolutionary economics it emphasises the role cognition and institutions play in the adoption of green technologies by firms a cognitive perspective derives from recent research on simple heuristics and context based rationality it is proposed that those findings can serve to analyse decision making of individual actors respectively firms and thus should complement economic analysis a second proposition is that eco efficiency and normative rules such as a factor four strongly rely upon institutions i e the ability of institutions to evolve over time and the development of those institutions that are most appropriate to enhance technological change in this regard business institutions and competition are crucial but regulatory needs remain in order to safeguard continuity of knowledge creation the framework allows for an analysis why overall adoption of eco efficiency still can be considered relatively slow and why some markets and firms are far ahead as a brief case study the article reflects upon german waste law s ability to enhance eco efficiency

dynamic factor demands and the effects of energy price shocks a dynamic model is used to understand how sharp changes in energy prices affect investment behavior employment and energy use the authors discuss the theory behind their model selection model specifications estimation methods and data list parameter estimates and elasticities for the selected model and describe the simulations they conclude that 1 the data strongly reject the hypothesis of constant returns to scale within their specification of aggregate production 2 the data indicate adjustment costs on labor are small and 3 their results help reconcile some of the conflicting estimates of energy demand elasticities appearing in recent literature 23 references 3 figures 3 tables

employment and technological innovation evidence from u k manufacturing firms this article uses british firm level panel data on actual innovative activity drawn from different statistical sources to identify the effect of technical change on jobs previous work tends to find positive associations of proxies for technical change and employment but such studies suffer from various statistical drawbacks in this study even when one controls for fixed effects dynamics and endogeneity innovations have a positive and significant effect on employment which persists over several years there seems to be little direct role for spillover effects from industry innovations or any role for industry wages or union power

a general index of technical change this paper outlines a procedure for estimating a general index of technical change within the context of a quite general production technology specifically when panel data are available for firms in an industry time specific dummies can be combined in a nonlinear estimation procedure to yield a general index of technical change that may be both nonneutral and scale augmenting this approach offers numerous advantages over the traditional time trend representation of technical change for example the general index can serve as the basis for analysis of the determinants of technical change results for a sample of 30 electric utilities over the period 1951 78 show that the productivity decline of the 1970s can be attributed primarily to sulphur oxide restrictions and secularly declining capacity utilization due to rapidly increasing peak load demands

active labor market policy evaluations a meta analysis this article presents a meta analysis of recent microeconometric evaluations of active labour market policies we categorise 199 programme impacts from 97 studies conducted between 1995 and 2007 job search assistance programmes yield relatively favourable programme impacts whereas public sector employment programmes are less effective training programmes are associated with positive medium term impacts although in the short term they often appear ineffective we also find that the outcome variable used to measure programme impact matters but neither the publication status of a study nor the use of a randomised design is related to the sign or significance of the programme estimate

does the opening of central and eastern europe threaten employment in the west t he opening up of central and eastern europe posed a profound economic challenge for the european union eu virtually overnight eu countries were confronted with a group of neighbouring countries with structurally very different economic conditions the economic system of the central and eastern european countries ceec was built on nearly 50 years of centrally based planning and even more important was the huge gap in income wages and productivity compared to the gradual process that characterises post war european integration the demise of the communist legacy represented an abrupt shock after a deep recession in the early nineties several transition countries are now doing well if this trend continues some of the ceec including poland hungary and the czech republic will turn into fast growing high performing countries in western europe this prospect is not greeted with enthusiasm by those policymakers business and trade union representatives who fear the competition of the newly emerging economies in central and eastern europe not surprisingly the adjustment to this new reality has become a key issue on europe s policy agenda not in the least because poland hungary the czech republic slovenia and estonia have started negotiations to join the eu in the near future most of the policy concerns relate to employment eastern europe represents a large reservoir of low wage labour in the eu s backyard there is a concern that

substitution possibilities for unpriced natural resources restricted cost functions for the canadian metal mining industry a bstract the effects of resource depletion on economic growth depend critically on the elasticities of substitution between non renewable natural resources and reproducible inputs estimation of the elasticities of substitution for natural resources has been hindered by the absence of data on their prices which results from the prevalence of vertical integration in natural resource industries in this paper we use the theory of restricted cost functions to develop a general procedure for estimating substitution possibilities for unpriced inputs estimation of the model with data for the canadian metal mining industry indicates that the elasticities of substitution for the natural resource metallic ore are equal to unity

the effects of profit sharing on employment wages stock returns and productivity evidence from uk micro data this paper provides evidence based on u k firm level data that 1 the authors cannot reject the view that profit sharing firms view the total level of remuneration as the marginal cost of labor which is contrary to much of weitzman s analysis 2 there is some support for the popular view that profit sharing raises total remuneration and can therefore be inflationary and 3 the introduction of profit sharing does lead to higher productivity but this combined with the employment reducing consequences of 2 leads the authors to conclude that the net employment effect is small and uncertain copyright 1990 by royal economic society