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      Policy reform and labour demand in branches of Sri Lankan manufacturing industry

      Gibson, John; Patabendige, Ananda Jasenthu
      DOI
       10.1080/00036840500367997
      Link
       www.informaworld.com
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      Citation
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      Gibson, J. & Patabendige, A. (2006). Policy reform and labour demand in branches of Sri Lankan manufacturing industry. Applied Economics, 38(12), 1459-1467.
      Permanent Research Commons link: https://hdl.handle.net/10289/1882
      Abstract
      Many policy reforms in developing countries aim to remove factor market distortions. Whether such reforms reduce unemployment depends partly on the substitution possibilities between labour and other factors of production. This paper examines labour demand in seven branches of Sri Lankan manufacturing industry, using data on 4-digit industrial categories over the 1990 to 1997 period. The Box-Cox transformation is used to allow for flexible, and data-dependent, elasticities. The elasticity of capital-labour substitution varies widely across the branches of industry and is usually variable rather than constant. The average, long-run own-wage elasticity of labour demand for the manufacturing sector is estimated as -0.80, so factor price policy should have an important effect on labour demand in this setting.
      Date
      2006
      Type
      Journal Article
      Publisher
      Routledge
      Collections
      • Management Papers [1125]
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