introduction to labour economics & personnel economics_t

8/17/2019 Introduction to Labour Economics & Personnel Economics_t

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LabourEconomics


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The aggregate of all human physical andmental e ort used in creation ofgoods and services .

Labor????

Labor is a primary factor of production . The size of a nation's labor force isdetermined by the size of its adult

population , and the extent to which theadults are either working or are preparedto o er their labor for wages .

http://www.businessdictionary.com/definition/aggregate.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/primary.htmlhttp://www.businessdictionary.com/definition/factor.htmlhttp://www.businessdictionary.com/definition/production.htmlhttp://www.businessdictionary.com/definition/nation.htmlhttp://www.businessdictionary.com/definition/labor-force.htmlhttp://www.businessdictionary.com/definition/population.htmlhttp://www.businessdictionary.com/definition/adult.htmlhttp://www.businessdictionary.com/definition/worker.htmlhttp://www.businessdictionary.com/definition/offer.htmlhttp://www.businessdictionary.com/definition/wages.htmlhttp://www.businessdictionary.com/definition/wages.htmlhttp://www.businessdictionary.com/definition/offer.htmlhttp://www.businessdictionary.com/definition/worker.htmlhttp://www.businessdictionary.com/definition/adult.htmlhttp://www.businessdictionary.com/definition/population.htmlhttp://www.businessdictionary.com/definition/labor-force.htmlhttp://www.businessdictionary.com/definition/nation.htmlhttp://www.businessdictionary.com/definition/production.htmlhttp://www.businessdictionary.com/definition/factor.htmlhttp://www.businessdictionary.com/definition/primary.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/aggregate.html


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Labor economics is the feld o

economics, which e$amines theor ani%ation , unctionin , and outcomeso labor markets& the decisions oprospecti'e and present labor marketparticipants & and the public policies ,which relate to the employment andpayment o labor resources .Campbell R. McConnell, Stanley L. Brue, DavidMacPherson (2 !",Contemporary Labor #conomics

http://www.economicsnetwork.ac.uk/books/LabourEconomicsEmployment.htmhttp://www.economicsnetwork.ac.uk/books/LabourEconomicsEmployment.htm


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Distinction of labor and scope of labor economics

Labor possess some distinguishablecharacteristics than those of other goods orservices.

Labor services are rented, not sold Suppliers of labor care about the way in

which the labor is used Labor productivity is affected by pay and

working conditions labor supply is affected by Non-monetary

aspects (i.e., leisure time)


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Aspect of Labor Explanations &Examples

Conse uences

1. Labor is a factorof production , not afinal product.

Unli e most goodswhich !ouseholdsbuy, labor is one ofthe few goods theysell.

"income effects wor in different waysfor labor than other goods# $perverse% responses li e $bac ward"bending%labor supply are more li ely"the demand for labor is a deriveddemand, from the demand firms facefor their products

&. Li e capital,labor is a flow ofser!ices attachedto a stock of"e uipment #$

'he $stoc % in thiscase is the wor erand the s ills he shepossesses.'he $flow% is theright to use it for a

period of time.

"the stoc must be produced andmaintained education, training areneeded."in most cases, delivery of the $flow%re*uires physical presence *uality ofthe wor environment matters

+. Unli e capital, the $stoc % cannot bebought and sold.

"Slavery is prohibited" or various reasons,people can-t sell

$shares% in themselves,for e ample to financeeducation

"borrowing constraints may matter forhuman capital investment (education)"human capital investment is ris ierthan physical capital investmentbecause it is non-di!ersifiable

Distinction of labor and scope of labor economics


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/. Labor is a very%eterogeneouscommodity

"0or ers are differentiated bytype of s ill, amount of s ill,demographic characteristics.

"a wide variety of pricesand mar et conditions fordifferent labor services cancoe ist. 'his gives rise to adistribution of earnings$

. 'he *uality of laborservices being supplied isoften %ard to measure .

"wor ers may simply $shir % "poor management decisionsmay not be apparent for years

"compensation andincentive systemsneed to be designedappropriately

2. Sometimes thedemanders and orsuppliers of labor haveconsiderable monopolypower$

"employers- associations,company towns, othermonopsonists"unions"search costs, relationship"

specifics ills and bilateral monopoly.

"usemonopoly monopsony and search theoryto study thesemar ets

3. Labor mar ets are%ig%ly regulated # thee change of labor is both%ig%ly taxed andsubsidi ed

"income and payroll ta es"income support programs"wor place safety legislation"immigration policy"industrial relations legislation"affirmative action, comparable worth

"government policyhas important effectson labor mar ets

Aspect of Labor Explanations & Examples Conse uences

introduction to labour economics & personnel economics_t

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