Analysis of Employment in the Manufacturing Sectors of Nine Urban Areas: The Relation between Average Hours Worked and Employment
The Review of Regional Studies
This paper investigates the short-term relationship between changes in the average number of hours worked and the number of workers employed. Nine medium-sized urban areas in Michigan have been chosen for the study, which deals with production workers engaged in manufacturing. It is assumed that changes in external demand for manufactured goods directly effect the amount of labor used by the manufacturing sector of the nine areas. An increase in demand causes an increase in labor.while a
... abor.while a decrease in demand has a negative effect on labor. Firms may adjust either the number of hours worked by their production workers or the number of workers they employ, or both. Correlation analysis is used to investigate the existence of leads or lags in the relationship between the two vari ables. A distributed-lag regression function is employed to examine the quantitative importance of this relationship. The results of correlation suggest a tendency for the two aggregate variables to change simultaneously or with short time lags. The time pat tern of the relationship depends on a number of factors, the most important of which are discussed in the paper. The results of regression indicate that the strength of the quantitative relationship can vary from area to area when the relationship between employment and hours worked during the same period is considered, while no significant regional differences are observed in the strength of the relationship between employment and hours worked in previous periods. Some policy implications of the results are discussed at the end of the paper.