Procyclical Labour Productivity, Labour Effort and Technology Shocks -a Study of Injury Rates in Swedish Manufacturing 1970-1992.

In empirical studies the finding of procyclical average labour productivity is common. Two possible explanations to these results have been suggested in the literature: (1) labour hoarding/labour utilization, and (2) the Real Business Cycle productivity/technology shock explanation. This study tries to discriminate between these hypotheses by estimatinf the labor input coefficient in a production function regression with instrumental variables that are assumed to be unrelated to technology shocks.