THE EMPLOYMENT CREATION EFFECTS OF FACTOR SUBSIDIES: SOME ESTIMATES FOR NORTHERN IRELAND MANUFACTURING INDUSTRY, 1955-1983 |
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| Authors: | Richard I D Harris |
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| Institution: | Department of Economics, University of Waikato, Private Bag, Hamilton, New Zealand. |
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| 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. |
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