Questions tagged [labor-economics]

Labor economics is the branch of microeconomics that studies labor markets and its peculiarities. Labor economists usually study topics such as career choice, returns to schooling, determinants of labor productivity, wages, gender and racial gaps.

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Does migration exacerbate (albeit delay) the problem of aging, economically-inactive populations in Western societies?

As a layman, I've always understood that there is a general consensus amongst economists that "immigration is economically beneficial" to rich Western countries (like Britain) who have aging ...
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20 views

Has there been an applications of search and matching theory in the Neoclassical Growth Model?

Specifically, I am looking for the standard neoclassical growth model, but the labour decision is based on either search or matching theory instead of a Walrasian labour mechanism.
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How are you supposed to calculate overhead expenses?

I'm doing a college assignment (creating a software product) in Computer Science and have been given a template for the part of the report about economics. At one moment it states the following: <...
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125 views

Instrumental Variable Paper for Minimum Wage

I am trying to write a paper dealing with minimum wages and employment. I understand there is simultaneity bias between these two variables so I must come up with an instrument. Does anyone have any ...
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21 views

Is it better for low-income people to live in the countryside where it's cheap or in the city where there are more services?

Supposing someone is struggling to pay the rent in an urban area, and they don't have anything tying them down to any one place, would it make sense to move to a rural area where the rent is much ...
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Are expensive cities economically threatened by an inability to house low-income workers?

Cities like New York, San Francisco, and others enjoy booming local economies that support high-paying jobs in industries like finance and technology. This and other factors have driven the price ...
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39 views

Immigration supply shocks, fixed effects and model interpretation

I'm new to this and I've been racking my brains for a couple days trying to understand this model and how to run it in Stata. More than programming help, I think I just don't understand the model well ...
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6answers
3k views

How do Marxist economists solve the Diamond-Water Paradox?

For class surveying different economic systems, I read a book on Marxism and its core beliefs. As I read, I came to learn that the Marxist view of economics depends heavily on the Labor Theory of ...
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Asymmetric Nash Bargaining

The Nash bargaining solution selects the unique solution to the maximization problem $\max_{s_1, s_2 } (s_1 - d_1) (s_2 - d_2)$ such that the solution satisfy the following axioms : Invariance ...
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145 views

Endogenous Gentrification and Rates of Return to Education

Gentrification is, roughly speaking, the displacement or exclusion of poor people from areas with improved amenities due to higher rents and costs of living. The question I have is whether better ...
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1answer
23 views

How exactly does removing labor​ market rigidities reduce structural unemployment and increase potential output in an economy?

Here I want to focus primarily on the potential benefits of labor market reforms such as a reduction in job security and trade union power and not their controversies. I wish to learn a few thoroughly ...
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46 views

Maximization problem FOC and Euler equation

Can someone please help me with the Lagragian and the derivation of the following objective function ? Beneath I provide the objective function, the constraint and the Euler equation that results from ...
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What impact would falling oil prices have on the natural rate of unemployment?

My intuition is that as the price level falls, cost of inputs is falling for suppliers and their output increases. More people are then employed to increase production - correct?
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Search and matching model: effect of hiring cost on wage curve

What effect does the hiring cost have on the wage bargaining outcome (wage curve)? In Cahuc, Carcillo, and Zylberberg: Labor Economics, they derive the following wage curve: $$w = z + (y-z) \frac{\...
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Looking for help with Solow Model Question [closed]

The question is this: Suppose there is a production function of $Q=F(K, L)=\sqrt{K}\sqrt{L}$. Suppose that MPC=0.8 and the labor force is growing at a rate of 0.05 per year. Also labor force ...
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1answer
24 views

How to account income from the informal sector?

Some context here. I'm from India and over here around 80% of the public work in the informal unaccounted sector. Yesterday, the main opposition party said that if they're elected, they'd compensate ...
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4answers
559 views

In GDP growth studies, are factors of production measured as stock or flows?

Consider the following cases: One machine (capital) is used by multiple producers within one year. For instance, farmers renting tractors from the same company. In this case, in terms of GDP, there ...
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214 views

Labour markets and supply-side policies: too much stress put on the WS push factors?

In reading several macro textbooks, it seems that most of the supply-side policies tend to be focused on the labour supply side (wage setting curve), instead on the firm/labour demand side(price ...
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132 views

When and why women left the labour market?

It is well documented that women in now developed countries entered the labour market all thoughout the 20th century. As such, female labour participation have consistently increased. For example, ...
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Have any economics papers used unified cure models?

Does anyone know if there are unified cure models (aka split population models) in time-until-employment studies that combine the mixture cure approach with the promotion time approach as described in ...
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2answers
705 views

Interest rate Effects on labour supply

I was analysing, free of specificities, the effects of an increase in the real interest rate on labour supply in a two period setting. The obvious effect on leisure is the intertemporal substitution ...
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How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

Decades ago a factory job could support a wife and kids until retirement and they offered insurance, benefits, etc. Now, no more unions, those jobs as well as tech and customer service jobs are ...
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1answer
34 views

DMP Search Model - Terminology

In the most basic Diamond-Mortensen-Pissarides (DMP) model we have the variable $V$ which represents the present discounted value of expected profits from a vacant job. The corresponding Bellman ...
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What predictions do economic models make for an economy where 50% of the population earn less than the cost of living? [closed]

These are the admittedly somewhat disparate pieces of information gleaned from separate sources that the question arose from. According to The living wage foundation the real cost of living in ...
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1answer
63 views

Does brain drain really affect a nation's growth trajectory?

Take India as an example. India has been losing most of its bright minds to the west. India also ranks low in development. I would like to get a definitive answer to this cause-effect type question. ...
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1answer
59 views

How reliable is BLS / JOLTS data on quits?

I'm looking at the Job Openings and Labor Turnover Survey (JOLTS). It also allows you to disentangle separations between layoffs and quits. The data comes from surveys, i.e. is self reported. There's ...
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3answers
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What are the causes of increase in productivity of labour?

This question has a specific context. While reading Adam Smith's The Wealth of Nations, edited, with notes and marginal summary by Edwin Cannan in 1904, one comes across the following lines on the ...
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2answers
74 views

Productivity and wages in a task-based model

In a task-based model like the one developed in Acemoglu&Autor 2011 with two types of worker, can the low type have a higher wage with respect to the high type? More specifically: if the ...
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25 views

What would the production function look like if MPN (marginal product of labor) were constant, rising and declining?

I know this is a macroeconomic topic and I believe I understand the what the graph for the production function (with Y, Real GDP, and N, labor on the axis) would look like if the MPN were constant and ...
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2answers
205 views

Cobb-Douglas production function, given $w$ get $r$ regardless of input levels. Why?

There is a market economy with technology given by: $$Y = K^\alpha L^{1-\alpha} \tag{1}$$ Firms behave competitively and input prices are: $$r = \alpha K^{\alpha-1}L^{1-\alpha} = \alpha(\frac{L}{K})...
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1answer
42 views

Factor-augmenting technologies (Acemoglu and Restrepo 2018c)

In that paper, they consider the following production function: $Y = F(A_KK,A_LL)$. Where: K denotes capital, L is labor, and $A_K$ and $A_L$ denote capital-augmenting and labor-augmenting ...
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How is labor demand measured?

For instance, in the introduction of this paper (first paragraph), talking about Figure 1, they say that labor demand is measured as the real wage bill normalized by population. Is it common to ...
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What is the relation between the trade deficit and the outsourcing of jobs?

To make it easier, let's imagine USA exports nothing and imports nothing (or the exports have the same value with the imports = 0 trade deficit = the country exports the same amount of jobs as it is ...
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61 views

Elasticity of substitution between leisure in two periods

This is a basic question, but I am new to macro models. The question is from Romer's text. Assume a household only has one member and has no initial wealth, and the household lives for two periods. ...
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1answer
35 views

Is there any reliable data on what % of the UK population currently earn less than £17,300 annually?

According to the Living Wage Foundation the "real living wage" in the UK is £9 an hour Which assuming a 37 hour week & rounding to the nearest whole GBP amounts to £17,375 Formula used ((9*37)/...
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3answers
130 views

Reference request: Gender wage gap / Minority wage gap

Disclaimer: I am neither a social scientist nor an economist. I hope the ESE is the right place to ask this question. Disclaimer 2: I do not intend to spark an ideologically driven discussion here. ...
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1answer
56 views

reference request: models of how racism or sexism affects decision making

My background is more in statistics and applied math, so I am not familiar with the breadth of decision making models from economics. However, I am working on a project that involves decision making ...
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Best financial model to proportionally distribute the company's income to all employees?

I'm planning to start a project of something "innovative". And among some of the parts of the project that I'm thinking about, it's in the term of how money (profits) should be distributed. The truth ...
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831 views

Why does immigration boost the economy? (or does it not…?)

I'm a novice at macroeconomics, and trying to understand the effect of immigration (from developing nations) on the economy of a developed nation. Specifically, I am considering the effect when the ...
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1answer
19 views

Macroeconomic models with labor-replacing capital?

I am reading article http://public.gettysburg.edu/~tlin/research/robots-main.pdf "A New Keynesian Model with Robots: Implications for Business Cycles and Monetary Policy" and I wonder how actual this ...
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1answer
126 views

Labour Productivity Growth and Reallocation of Labour

Using a shift-share methodology, labour productivity growth can be arise from productvity growth within a sector (within effect) or reallocation of labour to sectors with higher productivity (...
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3answers
52 views

Why do stricter emission limits cost jobs?

I live in Germany and as most people know the car industry is very important in our country. Currently, there is a discussion about stricter emission limits for cars in the European Union. The car ...
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4answers
830 views

How does the professional class fit into Marx and Engel's class struggle theory?

I know that in the first part of The Communist Manifesto, Marx and Engles discuss at length the relationship between the Bourgeois and the Proletarians. The former being the owners of the means of ...
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1answer
55 views

Hours worked increases with wage

So I have been given a utility function = $ 48 R + Ry -R^2$ where $R$ represents leisure hours and $y$ represents labour income. $y=rl$, $r$ is wage rate and $l$ is labour hours. Find hours worked ...
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2answers
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A confusion regarding search and matching model in Pissarides's “Equilibrium Unemployment Theory” book

I was studying chapter 1 of the book "Equilibrium Unemployment Theory" and I got confused about the way Pissarides has defined the probability of a firm not finding a worker in a short time interval $...
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0answers
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How can the number of hairdressers in the UK be up 50% since 2010?

In this recent article, The Economist argues that one of the reasons behind the anaemic recent wage growth in Britain is that the recent job growth has been concentrated in lower-productivity jobs and ...
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How do Marxists account for fiat money?

LTV predicts that fiat currency, which requires zero labor to produce, should have zero value. Empirically, fiat currency does not have zero value. How do Marxists account for this. The to responses I ...
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Empirical explanation on divergence between productivity and wages since the 70s

There is a well know graph, that shows a tight link between productivity and wages, until the 70s, and a break of the link since: There's a lot of possible explanations for this, I keep hearing more ...
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Does it make economic sense for only some universities in a certain area to pay their sports scholars?

Apparently ‘Athletic scholarships are common in the United States, but in many countries they are rare or non-existent.’ But are there countries where there are some universities that offer sports ...