Lecture 8 Labor Market Analysis(宏观经济学(南开大学,龚刚)

MacroeconomicsLecture8LaborMarketAnalysisI.IntroductionTheobjectivetostudyhowemploymentandthusunemploymentisdeterminedinthelabormarket.II.TheNaturalRateofUnemployment(NAIRU)ThenaturalrateofunemploymentItistheunemploymentrateatwhichtheeconomyisatequilibrium(oratitsgeneralstate).Sometimes,itisalsocalledtheNAIRU,standingfortheUnemploymentofNon-AcceleratingInflationRate.II.TheNaturalRateofUnemployment(NAIRU)Thenaturalrateofunemployment(continued)AssociatedwithNAIRUisthenaturallevelofemploymentandthenaturallevelofoutput(mayalsocalledthefull-employmentoutput).AssociatedwithNAIRU,thereisalsoanaturalrateofgrowth.II.TheNaturalRateofUnemployment(NAIRU)EmpiricNAIRUU.S.EuropeanChinaII.TheNaturalRateofUnemployment(NAIRU)TheImportanceofNAIRU.Generally,itistheobjectiveagovernmentshouldpursue.Inotherwords,agovernmentmaynotconsiderunemploymentasbeingaproblemiftheunemploymentrateisequaltoorbelowitsnaturalrate.II.TheNaturalRateofUnemployment(NAIRU)ThedeterminationofNAIRUGenerally,itisbelievedtobedeterminedbytheinstitutionalfactorssuchas•thewelfarepolicyofthegovernment•thestructuralofinformationtransmission•theindustryconcentration•thepoweroflaborunion•OthersHowaboutinChina?III.NeoclassicalTheoryofEmploymentEmploymentsupplydeterminedbythehousehold’soptimizationdecisionregardingthechoiceofconsumptionandleisureThisdecisionproblemgivesrisetothefollowingsupplycurveofemployment.III.NeoclassicalTheoryofEmploymentEmploymentsupply(continued)LsW/PIII.NeoclassicalTheoryofEmploymentDemandforemploymentdeterminedbyfirm’sproductiondecision(optimization).Optimizationcondition:W=MPL（Ld，…)fromthisoptimizationcondition,wecanderivedemandcurveforemployment.III.NeoclassicalTheoryofEmploymentDemandforemployment(continued)Forexample,iftheproductionfunctionisintheformofCobb-Dauglas:TheoptimizationconditioncanbewrittenasW=Y/Ld(A)Ld=Y/W1YAKLIII.NeoclassicalTheoryofEmploymentDemandforemployment(continued)III.NeoclassicalTheoryofEmploymentDemandforemployment(continued)Implication:Foranygivenscaleofoutput,aslongastherealwageissmallenough,demandforemploymentwillbelargerenough:Thisfurtherindicatesthatthemainreasonofunemploymentresultsfromthewagerigidat“toohighlevel”.when/0dLWPIII.NeoclassicalTheoryofEmploymentTheequilibriuminthelabormarketW/PLs,LdL*III.NeoclassicalTheoryofEmploymentTheequilibriuminthelabormarket(continued)Implication:Aslongaswagecanbeadjustable,unemploymentshouldnotbeaproblem.Themainreasonofunemploymentisthewagerigidityat“toohighlevel”ofrealwagerate.IV.KeynesianTheoryofEmploymentLaborsupplyW/PLSLIV.KeynesianTheoryofEmploymentThedemandforlaborintheshortrunIntheshortrun,theproductionline(capitalstock,K)isgiven.ThereforetheproductionfunctioncouldbewrittenasY=F(L)IV.KeynesianTheoryofEmploymentThedemandforlaborintheshortrun(continued)Thisindicatesthatthedemandforemploymentispurelydeterminedbythelevelofoutput.Specifically,1()dLFYIV.KeynesianTheoryofEmploymentThedemandforlaborintheshortrun(continued)AssumealinearproductionfunctionY=ALThedemandforlaborisgivenbyLd=Y/AImplication:wagehasnoimpactIV.KeynesianTheoryofEmploymentThedemandforlaborinthelongrunInthelongrun,thefirmisabletochooseamongdifferenttechniques(productionlines).Inthiscase,theproductionfunctioncouldbewrittenasY=F(K,L)IV.KeynesianTheoryofEmploymentThedemandforlaborinthelongrun(continued)IV.KeynesianTheoryofEmploymentThedemandforlaborinthelongrun(continued)PleasenotethedifferencefromtheusualsmoothedproductionfunctionImplication:wagemayhaveimpactonthedemandforemployment,thoughtheeffectisstilllimited(seethefigureinthefollowingpage)IV.KeynesianTheoryofEmploymentThedemandforlaborinthelongrun(continued)IV.KeynesianTheoryofEmploymentThedemandforlaborinagivenperiodInagivenperiod,somefirmsareintheshortrun.Inthiscase,wageisnotafactortodeterminethedemandforlabor.Otherfirmshowevermaybeinthelongrunsothattheyhavechancestochooseproductiontechniques(laborintensiveorcapitalintensive).Inthiscase,wagemaybeafactorindeterminingthedemandforlabor.IV.KeynesianTheoryofEmploymentEquilibriuminthelabormarketW/PL*LIV.KeynesianTheoryofEmploymentImplicationEvenifwageisfullyadjustable,unemploymentcanstilloccur.Themajorreasonofunemploymentisperhapstheinsufficiencyoftheproductionintheeconomy.