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'''Arbejdsmarkedsøkonomi''' forsøger at forstå funktion og dynamik på markederne for lønarbejde. Arbejdsmarkedet fungerer gennem interaktion mellem arbejdstagere og arbejdsgivere. Labour økonomi ser på leverandører af arbejdskraft (arbejdere), til de krav, arbejdskraft (arbejdsgivere) og forsøg på at forstå den resulterende mønster af løn, beskæftigelse og indkomst.
I økonomi, arbejdskraft er et mål for det arbejde, som mennesker. Den er traditionelt kontrast til sådanne andre produktionsfaktorer som jord og kapital. Der er teorier, der har udviklet et koncept kaldet menneskelig kapital (med henvisning til de færdigheder, at arbejdstagere besidder, ikke nødvendigvis deres egentlige arbejde).
'''Labour economics''' seeks to understand the functioning and dynamics of the [[Market (economics)|market]]s for [[wage labour]]. '''Labour markets''' function through the interaction of workers and employers. Labour economics looks at the suppliers of labour services (workers), the demands of labour services (employers), and attempts to understand the resulting pattern of wages, employment, and income.
Der er to sider af arbejdskraft økonomi. Labour økonomi kan generelt ses som anvendelse af mikroøkonomiske eller makroøkonomiske teknikker til arbejdsmarkedet. Mikroøkonomiske teknikker studerer rolle enkeltpersoner og enkeltvirksomheder på arbejdsmarkedet. Makroøkonomiske teknikker ser på sammenhængen mellem arbejdsmarkedet, markedet for varer, pengemarkedet, og markedet for udenrigshandel. Det ser på, hvordan disse interaktioner indflydelse makro variabler som beskæftigelsen, erhvervsfrekvens, samlede indkomst og bruttonationalprodukt.
In [[economics]],''' '''labour is a measure of the work done by human beings. It is conventionally contrasted with such other [[factors of production]] as [[Land (economics)|land]] and [[Capital (economics)|capital]]. There are theories which have developed a concept called [[human capital]] (referring to the skills that workers possess, not necessarily their actual work).
There are two sides to labour economics. Labour economics can generally be seen as the application of [[microeconomics|microeconomic]] or [[macroeconomics|macroeconomic]] techniques to the labour market. Microeconomic techniques study the role of individuals and individual firms in the labour market. Macroeconomic techniques look at the interrelations between the labour market, the goods market, the money market, and the foreign trade market. It looks at how these interactions influence macro variables such as employment levels, participation rates, aggregate income and [[gross domestic product]].
==The macroeconomics of labour markets==
==Microeconomics of labour markets==
[[neoclassical economics|Neoclassical economists]] view the labour market as similar to other markets in that the forces of [[supply and demand]] jointly determine price (in this case the wage rate) and quantity (in this case the number of people employed). However, the labour market differs from other markets (like the markets for goods or the financial market) in several ways. Perhaps the most important of these differences is the function of supply and demand in setting price and quantity. In markets for goods, if the price is high there is a tendency in the long run for more goods to be produced until the demand is satisfied. With labour, overall supply cannot effectively be manufactured because people have a limited amount of time in the day, and people are not manufactured.
However, the labour market differs from other markets (like the markets for goods or the financial market) in several ways. Perhaps the most important of these differences is the function of supply and demand in setting price and quantity. In markets for goods, if the price is high there is a tendency in the long run for more goods to be produced until the demand is satisfied. With labour, overall supply cannot effectively be manufactured because people have a limited amount of time in the day, and people are not manufactured.
The labour market also acts as a [[market clearing|non-clearing market]]. While according to neoclassical theory most markets have a point of equilibrium without excess surplus or demand, this may not be true of the labour market: it may have a persistent level of unemployment. Contrasting the labour market to other markets also reveals persistent [[compensating differential]]s among similar workers. ▼
Models that assume [[perfect competition]] in the labour market, as discussed below, conclude that workers earn their [[marginal product]] of labour.<ref>{{cite web |title=The Micro-Economics of Surplus Labour|url=http://www.econ.yale.edu/growth_pdf/cdp772.pdf|publisher=Yale University|author=Gustav Ranis|date=February 1997}}</ref>
===Neoclassical microeconomic model — Supply===
{{See also|Labour supply}}
▲The labour market also acts as a [[market clearing|non-clearing market]]. While according to neoclassical theory most markets have a point of equilibrium without excess surplus or demand, this may not be true of the labour market: it may have a persistent level of unemployment. Contrasting the labour market to other markets also reveals persistent [[compensating differential]]s among similar workers. Models that assume [[perfect competition]] in the labour market, as discussed below, conclude that workers earn their [[marginal product]] of labour.<ref>{{cite web |title=The Micro-Economics of Surplus Labour|url=http://www.econ.yale.edu/growth_pdf/cdp772.pdf|publisher=Yale University|author=Gustav Ranis|date=February 1997}}</ref>
[[Fil:Labour_economics-shortrun_supply_smaller.png|frame]]
Households are suppliers of labour. In microeconomic theory, people are assumed to be rational and seeking to maximize their [[utility function]]. In the labour market model, their utility function expresses trade-offs in preference between leisure time and income from time used for labour. However, they are constrained by the hours available to them.
This can be shown in a graph that illustrates the trade-off between allocating time between leisure activities and income-generating activities. The linear constraint indicates that there are only 24 hours in a day, and individuals must choose how much of this time to allocate to [[leisure]] activities and how much to [[wage labour|working]]. This allocation decision is informed by the [[indifference curve]] labelled IC. The curve indicates the combinations of leisure and work that will give the individual a specific level of utility. The point where the highest indifference curve is just tangent to the constraint line (point A), illustrates the optimum for this supplier of labour services.
<div style="float:center;text-align:center">[[File:Labour economics-shortrun supply smaller.png|Income/Leisure trade-off in the short run]]<br />''The Income/Leisure trade-off in the short run''</div>
If consumption is measured by the value of income obtained, this diagram can be used to show a variety of interesting effects. This is because the absolute value of the slope of the budget constraint is the wage rate. The point of optimisation (point A) reflects the equivalency between the wage rate and the [[marginal rate of substitution]]<ref name=Frank2006>[[Robert H. Frank|Frank, Robert H.]]; ''Microeconomics and Behavior''. McGraw-Hill/Irwin, 6th Edition: 2006</ref> of leisure for income (the absolute value of the slope of the indifference curve). Because the marginal rate of substitution of leisure for income is also the ratio of the marginal utility of leisure (MU<sup>L</sup>) to the marginal utility of income (MU<sup>Y</sup>), one can conclude:
:<math>{{MU^L}\over{MU^Y}} = {{dY}\over{dL}},</math>
where ''Y'' is total income and the right side is the wage rate.
<div style="float:center;text-align:center">
[[File:Labour wage increase small.png|Effects of a wage increase]]<br />''Effects of a wage increase''</div>
If the wage rate increases, this individual's constraint line pivots up from X,Y<sub>1</sub> to X,Y<sub>2</sub>. He/she can now purchase more goods and services. His/her utility will increase from point A on IC<sub>1</sub> to point B on IC<sub>2</sub>.
To understand what effect this might have on the decision of how many hours to work, one must look at the [[income effect]] and [[substitution effect]].
The wage increase shown in the previous diagram can be decomposed into two separate effects. The pure income effect is shown as the movement from point A to point C in the next diagram. Consumption increases from Y<sub>A</sub> to Y<sub>C</sub> and — since the diagram assumes that leisure is a [[normal good]] — leisure time increases from X<sub>A</sub> to X<sub>C</sub>. (Employment time decreases by the same amount as leisure increases.)
<div style="float:center;text-align:center">[[File:Labour supply income and substitution effects small.png|The Income and Substitution effects of a wage increase]]<br />''The Income and Substitution effects of a wage increase''</div>
But that is only part of the picture. As the wage rate rises, the worker will substitute away from leisure and into the provision of labour—that is, will work more hours to take advantage of the higher wage rate, or in other words substitute away from leisure because of its higher [[opportunity cost]]. This substitution effect is represented by the shift from point C to point B. The net impact of these two effects is shown by the shift from point A to point B. The relative magnitude of the two effects depends on the circumstances. In some cases, such as the one shown, the substitution effect is greater than the income effect (in which case more time will be allocated to working), but in other cases the income effect will be greater than the substitution effect (in which case less time is allocated to working). The intuition behind this latter case is that the individual decides that the higher earnings on the previous amount of labour can be "spent" by purchasing more leisure.
<div style="float:left;text-align:center">[[File:Labour supply small.png|The Labour Supply curve]]<br />''The Labour Supply curve''</div>
If the substitution effect is greater than the income effect, the labour supply curve (in the diagram to the left) will slope upwards to the right, as it does at point E for example. This individual will continue to increase his supply of labour services as the wage rate increases up to point F where he is working H<sub>F</sub> hours (each period of time). Beyond this point he will start to reduce the amount of labour hours he supplies (for example at point G he has reduced his work hours to H<sub>G</sub>) because the income effect of the wage rate has come to dominate the substitution effect. Where the supply curve is sloping upwards to the right (showing a positive wage [[elasticity (economics)|elasticity]]), the substitution effect is greater than the income effect. Where it slopes upwards to the left (showing a negative wage elasticity), the income effect is greater than the substitution effect. The direction of slope may change more than once for some individuals, and the labour supply curve is different for different individuals.
Other variables that affect the labour supply decision, and can be readily incorporated into the model, include taxation, welfare, work environment, and income as a [[Signalling (economics)|signal]] of ability or social contribution.
===Neoclassical microeconomic model — Demand===
This article has examined the labour supply curve which illustrates at every wage rate the maximum quantity of hours a worker will be willing to supply to the economy per period of time. Economists also need to know the maximum quantity of hours an employer will [[demand]] at every wage rate. To understand the quantity of hours demanded per period of time it is necessary to look at product production: labour demand is a derived demand, it is derived from the output levels in the goods market.{{citation needed|date=June 2012}} Other aggregate methods of assessing demand include [[surveying|survey]] metrics and sources of [[real-time Labor Market Information]].
A firm's labour demand is based on its [[marginal physical product of labour]] (MPP<sub>L</sub>). This is defined as the additional output (or physical product) that results from an increase of one unit of labour (or from an infinitesimal increase in labour). (If you are not familiar with these concepts, you might want to look at [[production theory basics]] before continuing with this article)
Labour demand is a derived demand; that is, hiring labour is not desired for its own sake but rather because it aids in producing output, which contributes to an employer's revenue and hence profits. The demand for an additional amount of labour depends on the [[Marginal Revenue Product]] (MRP) and the [[marginal cost]] (MC) of the worker. The MRP is calculated by multiplying the [[price]] of the end product or service by the [[Marginal Physical Product]] of the worker. If the MRP is greater than a firm's Marginal Cost, then the firm will employ the worker since doing so will increase [[profit (economics)|profit]]. The firm only employs however up to the point where MRP=MC, and not beyond, in neoclassical economic theory.<ref name="Frank2006"/>
The MRP of the worker is affected by other inputs to production with which the worker can work (e.g. machinery), often aggregated under the term "[[capital (economics)|capital]]". It is typical in economic models for greater availability of capital for a firm to increase the MRP of the worker, all else equal. [[Education]] and training are counted as "[[human capital]]". Since the amount of physical capital affects MRP, and since financial capital flows can affect the amount of physical capital available, MRP and thus [[wages]] can be affected by financial capital flows within and between countries, and the degree of capital mobility within and between countries.<ref>{{cite journal |last=Hacker |first=R. Scott |year=2000 |title=The Impact of International Capital Mobility on the Volatility of Labour Income |journal=Annals of Regional Science |volume=34 |issue=2 |pages=157–172 |doi=10.1007/s001689900005 }}</ref>
<div style="float:right;text-align:center">[[File:Marginal physical product of labour small.png|The Marginal Physical Product of Labour]]<br />''The Marginal Physical Product of Labour''</div>
According to neoclassical theory, over the relevant range of outputs, the marginal physical product of labour is declining (law of diminishing returns). That is, as more and more units of labour are employed, their additional output begins to decline. This is reflected by the slope of the MPP<sub>L</sub> curve in the diagram to the right. If the marginal physical product of labour is multiplied by the value of the output that it produces, we obtain the Value of marginal physical product of labour:
:<math> MPP_L.P_Q = VMPP_L </math>
The value of marginal physical product of labour (<math>VMPP_L</math>) is the value of the additional output produced by an additional unit of labour. This is illustrated in the diagram by the VMPP<sub>L</sub> curve that is above the MPP<sub>L</sub>.
In [[perfectly competitive]] industries, the VMPP<sub>L</sub> is in identity with the [[marginal revenue product]] of labour (MRP<sub>L</sub>). This is because in competitive markets price is equal to marginal revenue, and marginal revenue product is defined as the marginal physical product times the marginal revenue from the output (MRP = MPP * MR). The marginal revenue product of labour can be used as the demand for labour curve for this firm in the short run.
===Neoclassical microeconomic model — Equilibrium===
<div style="float:right;text-align:center">[[File:Labour demand in the short run small.png|A Firm's Labour Demand in the Short Run]]<br />''A firm's labour demand in the short run (D) and an horizontal supply curve (S)''</div>
The marginal revenue product of labour can be used as the demand for labour curve for this firm in the short run. In [[competition (economics)|competitive market]]s, a firm faces a perfectly elastic supply of labour which corresponds with the wage rate and the marginal resource cost of labour (W = S<sub>L</sub> = MFC<sub>L</sub>). In imperfect markets, the diagram would have to be adjusted because MFC<sub>L</sub> would then be equal to the wage rate divided by marginal costs. Because optimum resource allocation requires that marginal factor costs equal marginal revenue product, this firm would demand L units of labour as shown in the diagram.
The demand for labour of this firm can be summed with the demand for labour of all other firms in the economy to obtain the aggregate demand for labour. Likewise, the supply curves of all the individual workers (mentioned above) can be summed to obtain the aggregate supply of labour. These [[supply and demand]] curves can be analysed in the same way as any other industry demand and supply curves to determine equilibrium wage and employment levels.
Wage differences exist, particularly in mixed and fully/partly flexible labour markets. For example, the wages of a [[doctor of Medicine|doctor]] and a port cleaner, both employed by the [[National Health Service (England)|NHS]], differ greatly. There are various factors concerning this phenomenon. This includes the MRP of the worker. A doctor's MRP is far greater than that of the port cleaner. In addition, the barriers to becoming a doctor are far greater than that of becoming a port cleaner. To become a doctor takes a lot of education and training which is costly, and only those who excel in academia can succeed in becoming doctors. The port cleaner however requires relatively less training. The supply of doctors is therefore significantly less elastic than that of port cleaners. Demand is also inelastic as there is a high demand for doctors and medical care is a necessity, so the NHS will pay higher wage rates to attract the profession.
==Information approaches==
In many real-life situations the assumption of perfect information is unrealistic. The firm does not necessarily know how hard a worker is working or how productive they are. This provides an incentive for workers to [[laziness|shirk]] from providing their full effort — since it is difficult for the employer to identify the hard-working and the shirking employees, there is no incentive to work hard and productivity falls overall, leading to more workers being hired and a lower unemployment rate.
One solution used recently{{when|date=June 2012}} ([[stock options]]) grants employees the chance to benefit directly from the firm's success. However, this solution has attracted criticism as executives with large stock option packages have been suspected of acting to over-inflate share values to the detriment of the long-run welfare of the firm. Another solution, foreshadowed by the rise of [[temporary work]]ers in Japan and the [[Haken-giri|firing of many of these workers]] in response to the financial crisis of 2008, is more flexible job contracts and terms that encourage employees to work less than full-time by partially compensating for the loss of hours, relying on workers to adapt their working time in response to job requirements and economic conditions instead of the employer trying to determine how much work is needed to complete a given task and overestimating.{{citation needed|date=June 2012}}
Another aspect of uncertainty results from the firm's imperfect knowledge about worker ability. If a firm is unsure about a worker's ability, it pays a wage assuming that the worker's ability is the average of similar workers. This wage undercompenstates high ability workers and may drive them away from the labour market. Such phenomenon is called [[adverse selection]] and can sometimes lead to market collapse.{{citation needed|date=June 2012}}
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