1、1,The labor market,Labor Supply Workers Labor Demand Firms Market Clearing? Full employment,2,Characteristics or modes of mobilization of labor force,Non-Commodity Forced - Slave Free Household Militant Wage earner Civil servant House helpers,Commodity Prisoners Free Self employed informal sector Pe
2、asants Wage earner private firms,3,Structure of labor market,4,Structure of Labor Market,5,Labor Supply People in the labor force,Economically Active Population “EAP” civilian population with or without a job that have been looking for one in a period of time before the survey (BLS last 4 weeks),6,P
3、eople not in the labor force,Participating as students in the education system Unpaid household work Retired or with pensions For health reasons Volunteer in community services,7,Research questions on the labor supply,Who is in the labor market? Who is out of the labor market? Age Gender Position in
4、 the household Location,8,Why the participation rate changes overtime?,Cultural factors women in the labor market scholarships and school retention more years of study Discouraged workers effect Additional worker effect,9,Some participation rates in the US labor market,10,Differences in participatio
5、n rate according to gender,11,Participation rate according to race,12,Participation rate according race and gender,13,Civilian population between 16 and up and employed population,14,Research questions on the labor demand,Who has a job? Gender Age Qualifications Salary/Wage Hours of work Relation wi
6、th the owner of the firm,15,Rate of Employment emp/eap,16,What means to be employed,Wage earners a person that at the time of the survey/census was working with a salary in cash or in kind with a job but not working at the time of the survey due to various factors members of the army (where not prof
7、essionals),17,What means to be employed,Independent workers Professionals Self Employed Employers Workers without pay devoting a number of hours to earn money or goods or services,18,Some problems with the estimation of the employment,Underestimates the production for self consumption, especially at
8、 rural level The legal age hides child labor Informal workers above the age of retirement Seasonal workers not captured by the survey,19,Research questions on the Labor Demand,Who is unemployed? Age Gender Ethnicity Duration of unemployment Turn over,20,Unemployed and rate of unemployment,21,Researc
9、h questions on the Labor Supply,What means to be under employed? Does she/he wants to work more hours? Social/Demographic considerations,22,What is to be under employed,Open under employment (visible) people working for a salary o independently involuntary working less than the normal (legal) workin
10、g hours and willing to do it in the same job or getting an additional one. Hidden under employment Low hourly payment according to qualifications Voluntary under employment,23,Research questions on the labor supply,Who is over employed? Hours of work Social/demographic characteristics,24,Evolution o
11、f the civilian population above 16 years old,25,Civilian and EAP,26,Rate of participation (total),27,Participation rate accoding to gender,28,Evolution of employment and rate of employment (Total),29,30,Evolution of unemployed and unemployment rate,31,People not in the labor force,32,People not in t
12、he labor force but want a job now,33,Male and Female unemployment,34,Some dynamic analysis of unemployment,35,Changes in labor participation,It is difficult to define a single labor supply function For adult males participation is a function of the demographic growth For adult females it is a functi
13、on of the income of the household (expresed on the income of the HHH, plus a trend that reflects cultural factors Additonal workers are function of what happen with the other two.,36,Labor supply functions,Male participation f(pop.growth) Female participation f(wages, prime worker unemp, pw Y) Youth
14、 participation f(pw unemp, pw Y, Female emp.),37,Some findings,Male participation have been declining over time in relative terms Female participation, excluded the growing trend, tend to be counter cyclical if employment represents the cycle. Youth have a similar behaviour to females,38,Some findin
15、gs,In the US, female participation can have an U shaped behavior, since wage increases may induce it. With youngsters the trend is less clear,39,How may an ELR program affect labor supply,Depends on the ELR benefit If it is high enough to support a family there should be no changes, unless the disco
16、uraged effect was high before the ELR If it is not enough the effect can be a sudden increase in the rate of participation of additional workers,40,Other effects of ELR on labor supply,If schooling is a complementary part of ELR (scholarships for youngsters) the rate of participation could decrease.
17、 If childcare is considered and ELR activity, rate of participation may decrease,41,The Labor Demand,Depends mainly on the level of economic activity (GDP growth) and labor costs relative to the price of capital goods emp = f( GDP, w/k) The employment to GDP elasticity varies according to the busine
18、ss cycle,42,Labor Demand,Studies all over the world have found that price elasticity of labor is very low, ranging from 0.15 to 0.45 in most of the cases,43,The need to work with different labor markets,In countries with clear formal and informal sectors, the demand for labor should be taken into account in a different way. Informal markets are more wage sensitive than the rest. Informal markets are a way to escape “stickiness” of unionized wages,
