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Article
Would cheaper capital replace labour?
South African Journal of Economics (2010)
  • Alberto Behar, University of Oxford
Abstract
Left-leaning members of the ruling alliance should be careful what they wish for. By estimating elasticities of substitution and factor demand between capital and four labour types, we find micro-economic evidence that cheaper capital would reduce demand for labour. While capital and labour are substitutes, many but not all occupation types are themselves complements. These results allow for endogenous changes in output and apply to the vast majority of firms in our sample.
Keywords
  • Labour demand,
  • elasticity of substitution
Disciplines
Publication Date
2010
Citation Information
Alberto Behar. "Would cheaper capital replace labour?" South African Journal of Economics (2010)
Available at: http://works.bepress.com/alberto_behar/14/