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Author: | Smyth, D. J. Karlson, S. H. |
Title: | The effect of fringe benefits on employment fluctuations in U.S. automobile manufacturing |
Journal: | Review of Economics and Statistics
1991 : FEB, VOL. 73:1, p. 40-49 |
Index terms: | EMPLOYMENT OVERTIME LAY-OFFS FRINGE BENEFITS CAR INDUSTRY USA |
Language: | eng |
Abstract: | A theoretical and empirical analysis of employment adjustment is presented by automobile manufacturers in the USA. The model allows for variable elasticities of substitution among labor and other inputs and between hours and workers. A total compensation is used as a measure of labor cost. The labor effectiveness function has diminishing marginal returns to hours. The speed of employment adjustment depends on the relative costs of straight-time and overtime hours. Fringe benefits affect the relative costs of regular and overtime hours. They play a key role in determining the equilibrium employment and hours, and the speed at which employers adjust employment to equilibrium. |
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