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Labour Economics

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					Labour Economics
  Labour Resource
Land, LABOUR, capital, enterprise
Direct demand – consumers “vote”
Derived demand = depends on above “vote”
Productivity – how much in a period of time
MRPL  marginal product  extra production by
  addition of ONE unit of labour.
      See e.g. p 171 – 172
Market labour demand curve = quantity of labour
  demanded by all firms at each wage rate. ($, QDL)
  Curve Shift Factors
Curve shows change in QDL as PL changes
BUT shifts can happen too:
  Change in the demand for the product of labour
      Increase in QD of product  increase in QDL
  Change in price of other input resources
      Tech advances
  Change in worker productivity
      Increase MRPL and increase QDL
  Supply of Labour
Market Labour Supply Curve shows number
  of people willing to offer their services at
  each wage rate.
Opportunity cost of working = what else they
  could be doing (personal value system)
Level of skill involved (doctor v n’paper)
Geographic location & type of labour market
Distasteful jobs, service jobs, etc
Shifts in Supply Curve
  Change in income tax rates
   lower      net wage = left shift
  Change in composition of pop’n
   #   of people available (retirement)
  Change in household technology
   Better   tech = more work time – rt shift
  Change in attitude about work
   e.g.Role    of women (15% 46%)
        Age restrictions (child labour) = left shift :::CU p 175
Wage determination
Equilibrium agreement between HH and F
No shortage or surplus. [unreal]
 Wage differentials – different labour markets
 Non-monetary benefits, vacation time, benefits,
  working conditions
Value of Skills
EHSL - ELSL = Value of skills acquired

				
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