Labor Economic Market
1: Labor MarketY study LEPersonal Perspective: Direct relevance to us, management positionSocial Perspective: Current socio-economic problemQuantitative Importance to economy: labor important source of household income (wage size)Labor Market= unique featureWork deliver themselves,Continuity of employment, relationsMultiplicity of marketHeterogeneity of workers and jobsBasic of LM: LM outcomeChange level of composition of LB supply  Change level of composition  LB demandStructure of earningsLB management relation & collective bargainChange in level of composition of unemploymentLM Process: Market ForcesMarket ForcesInstitutional ForcesSociological ForcesInteraction bw DD & SS, have 2 mechanism 1. W.R change 2. MobilityLBMB= Check for emp practice and working con. MKF= important determinant in LBMKPFCOM= Condition for efficient MKFInstitutional Force:  Cover Intemention: Law, Regu, facilitates manage the area of insuffi LBMK compliment MK to work efficiency, compete with MKF( creat DD & SS)Employer Institution: rule & regu, own wage policy (oligopolistic power), discrimination, wageWorker’s institution: Limit SS (Union), PF license, contrac, strikeSociological force: social group of- determine wage, allocation, compete in particular market- SS of LB & determin wage rateRole of culture: indicate attitude, Role of Discrimination: Preferential TreatmentModern LBECO: A pragmatic blend: understand reality in all form and shape through practice of model building and empirical hypothesis testing.2. Supply of laborQuantity vs QualityIndifferent curve shows work vs leisure of same utility. Graph Marginal rate of Substitution-Budget ConstraintUtility MaximizationWage change & effcts on LBSS BehaviorBackward Bending LB SE curve: income and substitution effectIncome effect: Men IE>SE (work, leisure)Substitution effect: Women SE>IE (work, home, leisure) Elasticity of LBSS: (Change in Q Supplied)/(Change in wage rate)Non-LB income: Non LB (UP), Work (Down)Non Participant:Over employment:Under employment:Time and money cost: 1) Fixed Time Cost 2) Monetary Cost(Fixed & Variable)Differences in tastes (More sociological reason)

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