addison wesley longman, inc. © 2000 chapter 2 overview of the labor market
TRANSCRIPT
![Page 1: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/1.jpg)
Addison Wesley Longman, Inc. © 2000
Chapter 2
Overview of The Labor Market
![Page 2: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/2.jpg)
Addison Wesley Longman, Inc. © 2000
Labor Force Status of the U.S. Adult Population, 1994Figure 2.1
![Page 3: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/3.jpg)
Addison Wesley Longman, Inc. © 2000
Unemployment Rate = Unemployed/Labor Force
Labor Force Participation Rate = Labor Force/Population
![Page 4: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/4.jpg)
Addison Wesley Longman, Inc. © 2000
Unemployment Rates for the Civilian Labor Force, 1900-1994Figure 2.2
![Page 5: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/5.jpg)
Addison Wesley Longman, Inc. © 2000
Employment Distribution by Major Industrial Sector, 1990-1997Figure 2.3
![Page 6: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/6.jpg)
Addison Wesley Longman, Inc. © 2000
Relationship between Wages, Earnings, Compensations, and Income
Figure 2.4
![Page 7: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/7.jpg)
Addison Wesley Longman, Inc. © 2000
The Markets in Which Firms Must OperateFigure 2.5
![Page 8: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/8.jpg)
Addison Wesley Longman, Inc. © 2000
LABOR DEMAND
![Page 9: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/9.jpg)
Addison Wesley Longman, Inc. © 2000
Labor Demand Curve (based on data in Table 2.3)Figure 2.6
![Page 10: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/10.jpg)
Addison Wesley Longman, Inc. © 2000
Shift in Demand for Labor Due to Increase in Product DemandFigure 2.7
![Page 11: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/11.jpg)
Addison Wesley Longman, Inc. © 2000
Shifters of Demand
• Product Demand
• Prices of Substitutes and Complements
• Expectations
• Not Wages!!
![Page 12: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/12.jpg)
Addison Wesley Longman, Inc. © 2000
Wages Rise/Employment Falls
• Scale Effect – Costs rise– Prices rise– Sell less of the product– Need fewer workers
• Substitution Effect– Switch to capital– Need fewer workers
![Page 13: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/13.jpg)
Addison Wesley Longman, Inc. © 2000
Possible Shifts in Demand for Labor Due to Fall in Capital PricesFigure 2.8
![Page 14: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/14.jpg)
Addison Wesley Longman, Inc. © 2000
Different Labor Markets
• Market – demand for attorneys
• Industry – university demand for law professors
• Firm – U of A demand for law profs.
• These are all affected by wages differently
• These all affect wages differently
![Page 15: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/15.jpg)
Addison Wesley Longman, Inc. © 2000
LABOR SUPPLY
![Page 16: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/16.jpg)
Addison Wesley Longman, Inc. © 2000
Market Supply Curve for SecretariesFigure 2.9
![Page 17: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/17.jpg)
Addison Wesley Longman, Inc. © 2000
Shifters of Supply
• Wages in other professions
• Economy
• Population
• Costs/barriers such as education
![Page 18: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/18.jpg)
Addison Wesley Longman, Inc. © 2000
Shift in Market Supply Curve for Secretaries As Salaries of Insurance Agents Rise
Figure 2.10
![Page 19: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/19.jpg)
Addison Wesley Longman, Inc. © 2000
Supply of Secretaries to a Firm at Alternative Market Wages(More Elastic)
Figure 2.11
![Page 20: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/20.jpg)
Addison Wesley Longman, Inc. © 2000
Market Demand and SupplyFigure 2.12
![Page 21: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/21.jpg)
Addison Wesley Longman, Inc. © 2000
Demand and Supply at the “Market” and “Firm” LevelFigure 2.13
![Page 22: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/22.jpg)
Addison Wesley Longman, Inc. © 2000
New Labor Market Equilibrium After Demand Shifts RightFigure 2.14
![Page 23: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/23.jpg)
Addison Wesley Longman, Inc. © 2000
New Labor Market Equilibrium After Supply Shifts LeftFigure 2.15
![Page 24: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/24.jpg)
Addison Wesley Longman, Inc. © 2000
New Labor Market Equilibrium After Supply Shifts RightFigure 2.16
![Page 25: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/25.jpg)
Addison Wesley Longman, Inc. © 2000
New Labor Market Equilibrium After Supply and Demand Shift Left
Figure 2.17
![Page 26: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/26.jpg)
Addison Wesley Longman, Inc. © 2000
Effects on Labor Market Equilibrium of Industrywide UnionsFigure 2.18
![Page 27: Addison Wesley Longman, Inc. © 2000 Chapter 2 Overview of The Labor Market](https://reader036.vdocuments.site/reader036/viewer/2022062320/56649f4a5503460f94c6c12a/html5/thumbnails/27.jpg)
Addison Wesley Longman, Inc. © 2000
How Unions That Control Supply of Labor to a Market AffectLabor Market Equilibrium
Figure 2.19