Production functions distinguishing between the stock and utilisation dimensions of factor (labour and capital) inputs are critically surveyed. An extension to the existing literature is suggested whereby 'normal' and overtime hours are separated within an appropriate non-linear functional specification. The econometric performance of this model is then compared with the main alternatives from the existing literature. The empirical work is based on pooled cross-section/time-series data which refer to West German manufacturing industries, 1968-1978. Estimates of the returns to labour services are also discussed in the light of related theoretical aspects of factor demand functions.
- labor services
- manufacturing industry