Please use this identifier to cite or link to this item: https://www.um.edu.mt/library/oar/handle/123456789/91265
Title: Employment and labour hoarding : a production function approach
Authors: Vella, Melchior
Keywords: Labor demand -- Malta
Production functions (Economic theory)
Equilibrium (Economics)
Employment (Economic theory)
Issue Date: 2018
Publisher: Emerald Publishing Limited
Citation: Vella, M. (2018). Employment and labour hoarding: a production function approach. Journal of Economics, Finance and Administrative Science. Journal of Economics, Finance and Administrative Science, 23(46), 230-246
Abstract: Purpose: This paper aims to test the hypothesis that the effect of production slowdown on labour demand can be muted by labour hoarding. Design/methodology/approach: This study adopts a production function approach, using data from Malta, a small state in the EU. Findings: The results confirm the hypothesis and indicate that firms are normally prepared to employ and dismiss more workers in the long run than in the short run. Practical implications: This finding has important implications for developed countries, including that labour hoarding can be of certain relevance in times of economic slowdown as shocks are absorbed by internal flexibility. Originality/value: The results of this study add on to the existing literature in two ways. First, this study compares two industries –manufacturing and financial services– for which the former sector received support to hoard labour after the financial turmoil of 2008. Consequently, the dominance of labour hoarding in manufacturing relative to financial services is uncovered and the effect of hoarding practices on labour demand is estimated. Second, Malta is an interesting case because it is one of the smallest economies in the world and faces a high degree of vulnerability because of constraints associated with small size and insularity. As a result, firms adopt policy-induced measures to minimise adjustment costs.
URI: https://www.um.edu.mt/library/oar/handle/123456789/91265
Appears in Collections:Scholarly Works - FacEMAEco

Files in This Item:
File Description SizeFormat 
Employment_and_labour_hoarding.pdf
  Restricted Access
186.28 kBAdobe PDFView/Open Request a copy


Items in OAR@UM are protected by copyright, with all rights reserved, unless otherwise indicated.