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THE EMPLOYMENT CREATION EFFECTS OF FACTOR SUBSIDIES: SOME ESTIMATES FOR NORTHERN IRELAND MANUFACTURING INDUSTRY, 1955‐1983
Author(s) -
Harris Richard I. D.
Publication year - 1991
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1991.tb00130.x
Subject(s) - subsidy , elasticity of substitution , economics , production (economics) , manufacturing , factor price , capital (architecture) , order (exchange) , price elasticity of demand , output elasticity , production function , labour economics , function (biology) , microeconomics , business , market economy , archaeology , finance , marketing , evolutionary biology , biology , history
ABSTRACT In this paper, I use estimates of the parameters of an industry demand function and a CES production function for Northern Ireland manufacturing in order to measure the relative impact of factor subsidies on employment, capital, and output. A simulation model is able to differentiate the output and substitution effects of subsidies. The results indicate that since manufacturing industry in the province tends to operate with a labor‐intensive technology and, since its price‐elasticity of demand for output is very low, the employment creating effects of capital subsidies are strongly negative.