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    Introduction To Labor Economics

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    qulb abbas
    This chapter introduces labor economics and the key participants in labor markets - workers, firms, and the government. It discusses how labor economics studies how labor markets work and tries to explain outcomes related to topics like female labor force participation, immigration, minimum wages, unemployment benefits, and more. The appendix provides an overview of regression analysis, which is used to answer both positive and normative economic questions by manipulating available data.

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    Introduction To Labor Economics

    Uploaded by

    qulb abbas
    163 views9 pages
    This chapter introduces labor economics and the key participants in labor markets - workers, firms, and the government. It discusses how labor economics studies how labor markets work and tries to explain outcomes related to topics like female labor force participation, immigration, minimum wages, unemployment benefits, and more. The appendix provides an overview of regression analysis, which is used to answer both positive and normative economic questions by manipulating available data.

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    Introduction to Labor Economics

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    Introduction to Labor Economics

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    This chapter introduces labor economics and the key participants in labor markets - workers, firms, and the government. It discusses how labor economics studies how labor markets work and tries to explain outcomes related to topics like female labor force participation, immigration, minimum wages, unemployment benefits, and more. The appendix provides an overview of regression analysis, which is used to answer both positive and normative economic questions by manipulating available data.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    163 views9 pages

    Introduction To Labor Economics

    Uploaded by

    qulb abbas
    This chapter introduces labor economics and the key participants in labor markets - workers, firms, and the government. It discusses how labor economics studies how labor markets work and tries to explain outcomes related to topics like female labor force participation, immigration, minimum wages, unemployment benefits, and more. The appendix provides an overview of regression analysis, which is used to answer both positive and normative economic questions by manipulating available data.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 9

    Introduction to Labor Economics

    Chapter 1
    Labor Economics
    • Goals: Study how labor markets work and explain why
    some outcomes are more likely to occur than others
    – Why did female LFP increase in the 1900s?
    – How does immigration affect wages, labor supply,
    opportunities, etc of native workers?
    – How do minimum wages affect the unemployment rate?
    – Do wage and tax subsidies affect the demand for labor?
    – What impact do occupational and health regulations have on
    hiring, wages, etc.?

    2
    Labor Economics, cont.
    – Do human capital investment subsidies improve the well-
    being of disadvantaged workers?
    – Why does wage inequality exist?
    – What impact does affirmative action have on earnings, the
    number of minorities a firm hires, etc?
    – How do unions affect labor markets?
    – How do unemployment benefits affect the incidence of and
    length of spells?

    3
    Labor Market Participants
    • Workers
    • Firms Together (supply and demand)
    determine E* and w*
    • The Government

    4
    Labor Market Participants: Workers

    • Suppliers of labor • Determine:


    (aggregate individual – Whether or not to work
    decisions to derive an – How many hours to work
    upward-sloping labor – Which skills to acquire
    supply curve) – Whether or not to quit a job
    • Goal: Strive to maximize – Which occupation to work in
    well-being (utility) subject – Whether to join a union
    to constraints – How much effort to put forth
    at work

    5
    Labor Market Participants: Firms

    • Demanders of labor • Determine:


    (aggregate individual – How many workers to employ
    decisions to derive a – Which workers to hire
    downward-sloping labor – How much to pay each worker
    demand curve) – Whether to hire additional
    • Goal: Strive to workers
    maximize profits subject – Whether to fire workers
    to constraints – How much capital to employ
    – Working conditions
    – Length of the workweek

    6
    Labor Market Participants:
    The Government
    • Regulations determine ground rules in the labor market
    – Taxes on earnings
    – Training subsidies
    – Payroll taxes
    – Affirmative action laws
    – Minimum wages
    – Worker condition regulations
    – Immigration laws

    7
    Appendix: Econometrics

    • Regression analysis: the y  mx  b


    manipulation of
    available data to answer y = dependent variable
    positive (what is) and x = independent
    normative (what should (explanatory) variable(s)
    be) questions Δy
    m = slope =
    Δx
    interpretation: for a 1-unit
    change in x, by how much
    does y change?
    8
    Regression Example: GPA

    GPA  α  β  Hours
    • Hours = number of
    hours spent studying
    ΔGPA
    β
    ΔHours
    α  GPA if hours  0
    Regression analysis attempts to fit the data with a
    line by minimizing the sum of squared errors
     GPA  α̂  β̂  Hours 9

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