The Labor Market for Engineers: An Alternative Methodology

The labor market for engineers is analyzed by constructing and estimating separate demand and supply schedules. Both ordinary least squares and two-stage least squares are employed. Estimated cross-price elasticities of demand are used as a measure of the complementarity or substitutability of engineers and other factor inputs. The following conclusions emerge: The relative wage elasticity of demand is not a significant determinant of engineering employment though, with minor exception, research and development expenditures are. The supply of engineers tends to be responsive to absolute wage differences. Related occupations requiring less formal training than engineers tend to be complements rather than substitutes.