Apostolos Bantekas

Three essays on discrimination and factor demand Uppsala : Nationalekonomiska institutionen, Univ. 1992. - 155 s. : diagr., tab. ISBN:91-87268-14-0
Abstract

This thesis contains three empirical studies on
(i) the discrimination against immigrants,
(ii) the demand for female workers, and
(iii) the optimal utilisation of capital in Sweden.

In the first study we estimate the degree of wage and working environment discrimination against immigrants in the Swedish labour market. This is achieved by estimating statistical earnings and working environment functions using cross-sectional data for the years 1968, 1974 and 1981. We find that the degree of wage discrimination against immigrants is quite small in magnitude (less than 9 percent) and decreasing over time. However, the Swedish labour market seems to reward immigrants' education at a lower rate than for natives.

In the second study we investigate substitution possibilities between male and female wage-earners in post-war Swedish manufacturing. Within the framework of the neo-classical theory of production we estimate cost and factor demand functions, one for each of the factors: salaried-employees, male wage-earners, female wage-earners, and capital. The results are used to evaluate long run elasticities of substitution among these inputs as well as the impact of technological progress. We find strong substitutability between salaried employees and male wage-earners, salaried employees and female wage-earners, and female wage-earners and capital. The elasticity of substitution between male and female wage-earners is found to be very close to zero, suggesting that a consistent aggregation of these inputs is not possible. Moreover, it is found that capital is less substitutable for salaried employees than for male wage-earners.

In the third study we analyse optimal capital utilisation in Swedish manufacturing. The theoretical analysis shows that cost minimisation on the part of firms implies that a high degree of capital utilisation will be profitable whenever the ratio of the costs of the double -- or triple -- shift system to the costs of the single-shift system is less than unity. This ratio in turn is found to depend on four factors: economies of scale, shift differential, capital cost share under single-shift operation of the firm and ex ante capital-labour elasticity of substitution. Thus, there exists a positive relationship between capital cost share or ex ante elasticity  of substitution and high degree of capital utilisation, while a low degree of capital utilisation is more likely to be observed whenever the shift differential or the economies of scale are high enough. This is also confirmed by our  empirical findings based on firm-level data for 1985.