Markups in a dual labour market: The case of the Netherlands
We follow the production function approach to assess markups, which requires the estimation of the output elasticity of a free input. In the basic setup we estimate a structural value added production function, using temporary contract hours as free input. We find rather stable markups in the Netherlands in the period 2006-2016. We show that extending the free variable incorrectly with fixed contract hours results in an increasing markup. Findings are robust to an alternative setup, in which a gross output function is specified and materials are used as free input. Implications for applied wor... Mehr ...
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| Dokumenttyp: | doc-type:workingPaper |
| Erscheinungsdatum: | 2020 |
| Verlag/Hrsg.: |
Munich: ifo Institute - Leibniz Institute for Economic Research at the University of Munich
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| Schlagwörter: | ddc:330 / markups / free variable / flexible contract labour |
| Sprache: | Englisch |
| Permalink: | https://search.fid-benelux.de/Record/base-26846701 |
| Datenquelle: | BASE; Originalkatalog |
| Powered By: | BASE |
| Link(s) : | http://hdl.handle.net/10419/221804 |
We follow the production function approach to assess markups, which requires the estimation of the output elasticity of a free input. In the basic setup we estimate a structural value added production function, using temporary contract hours as free input. We find rather stable markups in the Netherlands in the period 2006-2016. We show that extending the free variable incorrectly with fixed contract hours results in an increasing markup. Findings are robust to an alternative setup, in which a gross output function is specified and materials are used as free input. Implications for applied work and policy are discussed.