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Heterogeneous Labor Demand in the Western Washington Sawmill Industry

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This paper estimates a model of dynamic factor demand for skilled (quasi-fixed) and unskilled (variable) labor with output as a choice variable of the firm using a normalized quadratic profit function. The historical period, 1980-1988 is analyzed using firm- and county-level pooled, cross-sectional, time series data. The analysis of demand elasticities and adjustment rates of quasi-fixed factors suggests that skilled and unskilled labor react differently to changes in relative prices. Skilled labor adjusts slowly to optimal levels (50% adjusted at the end of 2 yr). Decomposition of elasticities into output constrained and output unconstrained results confirms previous findings that, with output constrained, labor is a substitute for wood and energy. The unconstrained elasticities show that output effects dominate long-run adjustments. The analysis indicates the existence of neutral technological change in the industry. For. Sci. 41(1):181-193.

Keywords: Profit function; dynamic model

Document Type: Journal Article

Affiliations: Assistant Professor, 126 Natural Resources, Department of Forestry, Michigan State University, East Lansing, Michigan 48824

Publication date: 1995-02-01

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2015 Impact Factor: 1.702
    Ranking: 16 of 66 in forestry

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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