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.

  • Corporate Authors:

    University of Michigan, Ann Arbor

    Institute of Labor and Industrial Relations
    Ann Arbor, MI  United States  48109

    Employment and Training Administration

    Office of Research and Development, 601 D Street, NW
    Washington, DC  United States  20213
  • Authors:
    • Schwartz, A R
  • Publication Date: 1978-1

Media Info

  • Pagination: 172 p.

Subject/Index Terms

Filing Info

  • 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