Abstract
Most aggregative labor market models contain a marginal productivity expression in which the quantity of labor appears on the left hand side of the equation, and the right hand side includes the real wage and output. Some researchers have cautioned that if the output variable is treated as exogenous, econometric difficulties may result. However, the assumption that output is exogenous has not been tested. We estimate an equilibrium model of the labor market, and use it to test the assumption of output exogeneity. The assumption that output is exogenous cannot be rejected by the data. -Authors
| Original language | English (US) |
|---|---|
| Pages (from-to) | 394-400 |
| Number of pages | 7 |
| Journal | Review of Economics & Statistics |
| Volume | 71 |
| Issue number | 3 |
| DOIs | |
| State | Published - 1989 |
All Science Journal Classification (ASJC) codes
- Social Sciences (miscellaneous)
- Economics and Econometrics