Memorandum,
Oslo University, Department of Economics

Abstract: Using panel data for the Norwegian manufacturing, we revisit " the increasing returns to scale puzzle" for labour input. We consider the response of the input of white collar workers, blue collar workers, and blue collar worker hours to permanent changes in output. Permanent and temporary changes in output are treated as latent variables within a GMM estimation procedure.

Keywords: LABOUR MARKET; DEMAND; EVALUATION

JEL-codes: C23; J23; C13

58 pages, 1996

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