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While Alan Freeman has posed a very general set of issues, he starts
with a quite specific example:
> " For example, if wage
> demand is specified as a function of employment levels then it is
> endogenous, if not it is exogenous; but this does not tell me the
> analytical grounds for the choice of equations."
>
Daniel Hamermesh's excellent (in my opinion) and widely cited book
entitled LABOR DEMAND (Princeton, 1993) gives a very
straightforward and intuitive discussion (pp.18-19) of when an and why
an empirical labor economist would choose to assume wages
endogeonous versus employment endogenous versus the more general
case of both endogenous. It does not get at the deeper issues, but it
does deal well with the example, and might lead Freeman to some
useful generalizations...
Robert Goldfarb
George Washington Univ
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