THE EFFECT OF BENEFITS AND OVERTIME COSTS ON THE SHORT RUN CYCLICAL DEMAND FOR LABOR IN THE AUTOMOBILE INDUSTRY IN MICHIGAN
The basic problem that is studied is the effect of rising fringe benefit costs on the decision of employers whether to obtain desired changes in labor inputs by adjusting their number of employees or by their use of overtime hours. If employers are using more hours due to higher fringe benefits costs, a fringe barrier to additional employment is created. A model of total labor demand is derived. The unique feature of this model is that it is derived from the minimization of a cost function that includes fringe benefits as a cost. Since some fringe benefits vary with employment and not with hours, it is possible to enter separate costs for hours and employment and derive separate estimating equations for each. Support is provided for the idea of a fringe barrier effect by the regression model that is derived from the theoretical model.
University of Michigan, Ann ArborInstitute of Labor and Industrial Relations
Ann Arbor, MI USA 48109
Employment and Training AdministrationOffice of Research and Development, 601 D Street, NW
Washington, DC USA 20213
- Schwartz, A R
- Publication Date: 1978-1
- Pagination: 172 p.
- TRT Terms: Analysis; Automobile industry; Benefit cost analysis; Costs; Economic models; Employee benefits; Employment; Fringe parking; Labor costs; Labor market; Mathematical models; Motor vehicle industry; Unemployment
- Uncontrolled Terms: Cost analysis
- Subject Areas: Administration and Management; Economics; Finance; Highways; Vehicles and Equipment;
- Accession Number: 00181010
- Record Type: Publication
- Source Agency: National Technical Information Service
- Report/Paper Numbers: DLETA-91-26-76-69-1 Final Rpt.
- Contract Numbers: DL-91-26-76-69
- Files: TRIS
- Created Date: Sep 14 1978 12:00AM