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11 Cards in this Set

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Differences between the product Market and the labour market
1) Don't own: in labour market, labour is rented.

2)Other Factors are Important:Non-pecuniary aspects are important not just price (e.g. work environment).

3) Context: legislative constraints--> the employment transaction
Decisions by Individuals (sellers) (8)
1) When to enter the L.F.
2) how much training and education is available--> what will you get from this.

3) Type and extent of job search

4) What kinds of Occupations/Industries

5) Labour Hours/ Household work

6) Accept/Quit/Relocation

7) Wage rate

8) Union/association
Decisions by Employers (buyers)
1) # of workers
2) wages and benefits
3) hours
5) layoff/bankrupcy
6) Subcontract
7) Pension and Retirement Policy
Decisions by Governments
1) Have to decide what to provide publicly

2) Individual Rights vs. employer competiveness

4) Public Support (training, insurance, compensation, vocational rehabilitation)
Labour Economics
Involves Analsing the determinants of the various dimensions of labour market supply and demand and their interaction in alternative market structure to determine wages, employment and unemployment.
Normative Economics
A theory of behavior in labour markets. It is concerned with what ought to be.
-has a value judgement
Positive Economics
A theory of behavior that has four critical assumptions:

1) Individuals respond positively to benefits and negatively to costs

2) Scarcity: implies that we need to make a choice.

3) Rationality (Individuals are assumed to behave rationally--> try to maximize utility. Firms objective: to maximize

4) Consistent behavior: if individuals are rational they will behave consistently
How to Evaluate an Economic policy (2)
1. Efficiency
-has to do with the resources
a) we would like it if all of our resources were fully ysed.
b) resources must be used the right way.

2. Equity: distributional impacts. e.g. women should be paid equally if they are doing the same work as men.
Labour Force Participation Rate
Tells you how many people are in the labour force relative to the size of the population.
-overtime LFPR are increasing. The big change is women: in 1950s 23.0% of women were participating, now 59.5% of women are participating

-decline in men
-Canada's unemployment rate is higher thant th US
Unemployment Rate
The number of people unemployed/the number of people in the labour force
Employment Rate
# of people employed/population (15+)