FH Düsseldorf2013-2014

Pablo Agnese

Labor & Personnel Economics

pablo.agnese@fh-duesseldorf.dewww.pabloagnese.com

(23.32 00.43)

• Unit 1: Introduction

• Unit 2: Definitions, facts, and trends

• Unit 3: The demand for labor

• Unit 4: The supply of labor

• Unit 5: The determination of wages

• Unit 6: Personnel Economics

Outline

Goals

• Different approaches / Philosophical background

• Some technical stuff

• Some challenging discussions

Main textbooks:• McConnell, Brue, Macpherson• Ehrenberg, Smith• Kaufman, Hotchkiss• Lazear, E., Personnel Economics in practice

Also:• W. Block (Austrian School)

Literature

Grading

• Test (80%)

• Weekly practices (20%)

• Monitoring: email exchange and/or tutorials

• Unit 1: Introduction

• Unit 2: Definitions, facts, and trends

• Unit 3: The demand for labor

• Unit 4: The supply of labor

• Unit 5: The determination of wages

• Unit 6: Personnel Economics

1. Introduction

1.1 Why labor economics?• Socioeconomic reason• Quantitative reason• Particular features (?)

1.2 Division of labor and comparative advantage• Task specialization• Efficiency• Human capital and technological development• Price system• Negative effects?

1.3 Positive and normative economics

• Positive economics identifies two assumptions:– Scarcity– Rationality

• Normative economics looks at two types of transactions:– Beneficial exchange (voluntary) – Redistribution (involuntary)

• Intervention v. non-intervention

The labor market allows mutually beneficial exchanges between employers and employees

Sometimes this might prove difficultMarket failures and / or government failures :• Ignorance or lack of information• Externalities• Public goods• Regulations• Price distortion

1.3 Efficiency and Equality

• No single set of Pareto-efficient transactions

• “Social goal” What set is the most equitable?

• Decisions on equality political matter

• Define a subjective standard of justice

• Economics is NOT a zero sum game!

Summary of 1st class

• Why labor economics?

• Division of labor and comparative advantages

• Positive and normative: role for government?

• Market failures: role for government?

• Efficiency and equality: role for government?

• Say’s law

We should ask then:

• Why should we specialize?- E.g. Hunters and collectors- People have different natural skills (sports, risky jobs)- Education- Cooperation

• What are the obstacles?- Coordination

• How does the capitalist system solve these problems?- Price system (commodities and labor!)- Prices/wages productivity of firms/disutility of work