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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How to compute elasticity of substitution in labor market of blacks and whites using experience-education groups?

I'm reading "Competition in the Promised Land – Black Migrants in Northern Cities and Labor Markets", by Leah Boustan, and I'm trying to understand her computation of black and white ...
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1answer
15 views

Sunk costs - Book value and Market value

i try to understand the concept of sunk cost and how we compute sunk costs when there is a difference between book and market value. For example, if the book value of assets is ...
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Fixed cost, sunk costs and variable costs

i need to answer to this question but i'm wonder if i need to use the short-run cost function (C = wL * rK) of not. Can you help me ? This is the statement : A small business owner employs 5 workers. ...
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Brücker et al. (2014) migrant labour supply shock

Brücker et al. (2014) write down a stylized model of wage-setting with a labour supply shock (migration), which I find hard to follow. Maybe somebody worked on it or is interested.. Labour force is ...
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28 views

Behavioral responses of tax policy on labour supply ( first time doing Difference in Differences)

I am trying to estimate the causal effects of the The Working Income Tax Benefit (WITB) on the labour supply of married women in Canada. The WITB is essentially equivalent to the EITC. I am looking at ...
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Derivation of wage rate from nested CES production function

could anyone please help to explain how equation (4) in this paper is derived? I understand that it's an application of first order conditions using the chain rule from equations (1)-(3), but the ...
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1answer
16 views

Is there contradiction between automation created resilience and the full employment (with high wages)?

From the one side - full employment with the high wages (but still under the level of creating inflation threat) is nice thing and politicians and central banks are highly motivated to achieve this. ...
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Marginal Cost of Labour Under Monopsony - is the real world like this?

How common is a Perfectly Discriminating Monopsonist in respect to labour rates? Or anything close to it? Standard explanations show a normal supply curve for labour, and the marginal cost of that ...
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1answer
28 views

Advice on method for analyzing the effects of increase in minimum wage

As a hobbyist and generally curious person with a lot of free time at home, I was curious what would be a good method to analyze the effect of an increase in the minimum wage of a country if you only ...
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1answer
63 views

What is the term for workers who outputs more than other workers at the same wage thus depressing wage for others? [closed]

What is the specific term for this worker: A worker who outputs more than other workers at the same wage, therefore now the owner doesn't have to pay workers as much since he gets the same total ...
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Labor Supply- how to do comparative statics?

Consider an economy with a competitive industry where the representative firm's production function takes the form of a Cobb Douglas production function $Y=z K^{\theta} L^{1-\theta}$. $z$ is an index ...
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Probability transition matrix as a function of the variance in Matlab?

I am working on Probability transition Matrix on Matlab. I Have say 5 points (states) of discretized productivity grid. I would like to have two matrix of probability transition subject to the ...
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Imputing # of unemployed from Labor Force Survey

I am working on state-level data, where one state has recently stopped publishing the absolute figures for the number of the unemployed. Instead, it currently only releases U and LFP rates. ...
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5answers
692 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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1answer
40 views

Productivity issue

Could someone help with the following? Company produces products of daily demand. It employs workers In number of 12 people (HER) Wages of workers. The costs of hiring and firing are 25 per employee, ...
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2answers
59 views

Dataset on university enrollment?

I'm looking for a dataset with stats on tertiary education enrollment in the US, per state, at least a couple decades back. I've searched but cannot seem to find anything. Could someone help me out?
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1answer
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Walras Law in a production economy with fixed costs

Consider a price taking firm with fixed costs $fc \geq 0$: \begin{align*} \Pi &= \max_{n^D} \left\{ P_c F(n^D) - w\times n^D - fc \right\} \end{align*} A representative household owns this firm:...
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1answer
40 views

How does demand curve for labor change when there is a proportional payroll tax on employer

In the textbook "Borjas, G.J. Labor economics." (Boston, Mass.; London: Irwin/McGraw-Hill, 2009) fifth edition [ISBN 9780070172708]. Below is a screenshot of the example of payroll tax of 1 ...
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5answers
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Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?

Card and Krueger's paper (AER 1994, "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania") uses a difference-in-difference identification strategy to ...
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3answers
11k views

Why does the real wage = W/P?

Im reading about labour markets, and the notes mention that the real wage 'w' = W/P, where W = the nominal wage, and P = the price level. Could someone please use some 'W' and 'P' as an example to ...
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1answer
41 views

Understanding distortions in investment in human capital

I am currently reading Economics of The Colour Bar by WH Hutt, and I'm having trouble understanding this bit he has written: “But when the price of any commodity is raised above the free market level, ...
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1answer
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What are the economic drivers of urbanisation?

It is regularly argued that urbanisation drives economic growth (e.g. here). I wonder which are the drivers that lead to urbanisation in the first place? I believe the historical case of the ...
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1answer
55 views

Does education have any value for most people's work?

Let me first say that I am not an economist. However, I was having a discussion with one of my friends who claimed that he had absolutely no gain from his education other than it actually being the ...
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1answer
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How to test if the effect of one regressor entirely comes from other regressors?

I have a regression model that includes IQ test scores as the dependent variable; my own education, my father's education and my mother's education as independent variables. Suppose I want to know ...
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33 views

Differentiated or uniform tax

Suppose Person 1 is working in Denmark and has the utility function, $$u(c,l)=c-\frac{\eta}{\eta+1}(24-l)^{\frac{\eta+1}{\eta}}$$ His wage after tax is $w(1-t)$, where tax, t, $0<t<1$. A second ...
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1answer
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Maximized tax revenue & foreign labor

I'm dealing with a tricky assignment, and I have no idea of where to begin. Person 1 lives in Denmark and has a utility function given by, $$(1) \ \ u(c,l)=c-\frac{\eta}{\eta+1}(24-l)^{\frac{\eta+1}{\...
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3answers
5k views

Why do wages not equalize across space?

In standard economic theory wages are simply prices on the labor market determined in equilibrium by the supply and demand of labor. Looking across space within countries it is however standard to ...
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1answer
275 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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1answer
27 views

EmpirIcal evidence on effects of price floors and ceilings

In introductory microeconomics, when studying partial equilibrium, we are introduced to the idea that a price floor will cause excess supply and a price ceiling will cause excess demand. How strong is ...
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1answer
28 views

Why can the job offer have a negative relationship between salary and quantity of work?

Excuse me the following question arose, is it possible that the job offer has a negative relationship between salary and the amount of work?
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1answer
29 views

The current economic understanding of the effect of labour unions on employment and wages

What are the currently largely accepted views on the effect of labour unions on employment and wages? Where can I read more about the currently established theoretical models that model labour unions?
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1answer
128 views

Labor market model with subsidies homework

I would appreciate some help with my homework in comparative statics. L is the demand of labor F(L) is the production function $ \frac{\partial F}{\partial L} > 0 > \frac{\partial^2 F}{\partial ...
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1answer
32 views

Applying modern economics to Edgeworth's Hedonical Calculus

Preface The late 1800s was a genesis for many economic theories. As math spilled over into the social sciences, one of the more obscure applications of measurement was: Hedonical Calculus, developed ...
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Are there any measures of U-6 Unemployment that take into account ageing out of the work force explicitly?

Labor Force Participation has been steadily decreasing over the last 20 years or so. The Fed says that this has been the case mostly due to the demographic shifts, and to an extent the data backs that ...
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1answer
31 views

Do barriers to entry increase the (collective) market power of incumbent suppliers?

For example in the case of the labour market lower immigration means that low-skilled labour can ask higher wages or better conditions (other things equal). Low skilled labour may have even put the ...
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20 views

Is this weighted least squares or just weighting the dependent variable

I am a little confused as to what the following line means. Do the authors mean they run a weighted least squares using the sample size as weights, or just weight the dependent variable using the ...
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1answer
49 views

Average ability conditioning on having accepted an offer

There is a continuum of workers between 0 and 1. These have ability $\alpha\sim U[0,2]$. A firm offers them a salary $v$ and has profits $$ \pi = (\rho \alpha-v) n(v) $$ where $n(v)$ is the fraction ...
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1answer
26 views

Economic impact of employer ignorance to cliff effects?

Let's say an employee, Mike in Indiana, earns \$10.50 an hour. He gets a raise to \$13, but because he is no longer eligible for SNAP (food stamps), his net earnings actually go down. His wage has ...
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1answer
47 views

extensive vs intensive labor in US in recent decades

Total Hours worked is a mix of extensive (to work or not, the usual standard working week) and intensive (how many hours to work). I'm interested in how this balance of extensive and intensive ...
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2answers
97 views

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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3answers
5k views

What has caused the recent 25% unemployment rate in Spain?

The unemployment rate in Spain has recently been fluctuating around 25%. What has caused this?
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1answer
49 views

Does labor negatively affect output (from empirical perspective)?

I am estimating Cobb-Douglas production function for US using time series framework: $$Y_t=A_t \times L_t^\alpha K_t^\beta $$ where $Y$ is output, $A$ is $TFP$, $L$ is labor and $K$ is capital. After ...
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1answer
124 views

Could price floors improve worker safety in the meat cutting industry?

Could price floors improve worker safety in the meat cutting industry? My question is inspired by the Future Perfect podcast https://www.vox.com/future-perfect/21502225/chicken-meatpacking-plant-...
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2answers
57 views

regression method for data that contain a number of observation for several years

I have a data set about 125 companies. For each company I have the salary and some other variables about the top 5 managers in each company. One observation contains the top 5 managers in each one of ...
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Estimating $dL/dw$ with direct dependencies using total differential

I have $U(C,L) = U(C) - v(L)$ where $C$ is consumption and $L$ is labor supply. From my first order conditions, $C$ is a function of $w$, wage, and $L$. $L$ is a function of $w$ and $C$. Leisure is $N ...
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1answer
77 views

The decline in the number of domestic servants

does it mean that the market mechanism does not work—that the offer of the going rate of wages does not secure a servant because servants do not move to the highest bidder? This complaint—which would ...
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3answers
665 views

Field experiments on labour market discrimination: do sizes of randomly assigned groups matter?

In traditional field experiments on racial discrimination, two identical resumes differing only by name or ID photo are sent to randomly selected firms. A statistical test is then run on the number of ...
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5answers
384 views

What determines whether slavery is economically efficient in industrialized/modern era economies?

Various forms of slavery were nearly universal before the industrial revolution. After industrialization, it would naively seem forced labor would continue to be widespread, as there is no way to ...
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55 views

Marginal rate of substitution interpretation

I am trying to interpret the marginal rate of substitution stidied in an article. The article in question is Burbidge, J. B., Robb, A. L., 1980. Pensions and retirement behaviour. The Canadian Journal ...
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1answer
147 views

Could a “Japanese-style strike” work as it's supposed to? Under what conditions?

This is an urban legend, mostly believed in Spain and some countries in South America. The legend is based on the premise that their way to make a strike would be to work much more than usual in some ...

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