WEEK1
Introduction
bestworker lowest
possiblewage
wages
laborer good
DEMAND firm DEMAND consumers
supply consumes supply firm
outputtiedtosupply outputnottiedtoSUPPLY
requiresmoreregulation
4 pronetoexploitation
analysingthis weneedto
detrend
data
a employment twochange
showstrueeffectofchange
, ILaboursupply
force
Labour UtE
unemployed t employed
employed
employed
I
jjj.m.mn
participates
outofLF
force
Labour
participationrate
labourforce
adult topopnotininstitutions
unemployment.ae
amtmninaD
beingunemployedhessubjectivecriteria
4 understatesunemployed doesn'ttakethisintoaccount
Employment populationratio
moreaccuratemeasureoffluctuation ineconomicactivity
But IElpcouldbeeitherdue to to orexogenous f in P
t womendo
productivity
pittateA
parttime
y
workinghoursd
1A neoclassicalmodel
utility
U = f (C; L)
, violatestransitivity
needstotradeofflargeCformore
Budgetconstraint
I
easiertotest C = wh + V
w wage
h workinghours
V nonlabourincome
n t c
d
C = w(T ¡ L) + V
com nonlabour
income
C hours
leisure
slope
Cgivennowork O endowment
choiceofworkinghours
envex diminishingMrs
g w
t
1 ofhaste w
I w
Muc Ypention Ypentione
, LetV9
shiftsbudgetconstraint
up
p p
weknowthisisthecase
ineffery t givennonlabourincomet talweyst
Letwin
constraint
pivotsbudget up
es or
dominates
withhighwages
incomeeffect substitutioneffect
dominates dominates
effect
income substitutioneffect
clongsent
e
isolates Ic Al I p p me in
Al
pye th byincomeegret
t
fessedbyinconet
pricesarefixed Utilityisfixed
income
inincome f priceofleisure
Tdemandforleisure Ierististeisenstinising
purelytummy
onlyforthosealreadyworking
Introduction
bestworker lowest
possiblewage
wages
laborer good
DEMAND firm DEMAND consumers
supply consumes supply firm
outputtiedtosupply outputnottiedtoSUPPLY
requiresmoreregulation
4 pronetoexploitation
analysingthis weneedto
detrend
data
a employment twochange
showstrueeffectofchange
, ILaboursupply
force
Labour UtE
unemployed t employed
employed
employed
I
jjj.m.mn
participates
outofLF
force
Labour
participationrate
labourforce
adult topopnotininstitutions
unemployment.ae
amtmninaD
beingunemployedhessubjectivecriteria
4 understatesunemployed doesn'ttakethisintoaccount
Employment populationratio
moreaccuratemeasureoffluctuation ineconomicactivity
But IElpcouldbeeitherdue to to orexogenous f in P
t womendo
productivity
pittateA
parttime
y
workinghoursd
1A neoclassicalmodel
utility
U = f (C; L)
, violatestransitivity
needstotradeofflargeCformore
Budgetconstraint
I
easiertotest C = wh + V
w wage
h workinghours
V nonlabourincome
n t c
d
C = w(T ¡ L) + V
com nonlabour
income
C hours
leisure
slope
Cgivennowork O endowment
choiceofworkinghours
envex diminishingMrs
g w
t
1 ofhaste w
I w
Muc Ypention Ypentione
, LetV9
shiftsbudgetconstraint
up
p p
weknowthisisthecase
ineffery t givennonlabourincomet talweyst
Letwin
constraint
pivotsbudget up
es or
dominates
withhighwages
incomeeffect substitutioneffect
dominates dominates
effect
income substitutioneffect
clongsent
e
isolates Ic Al I p p me in
Al
pye th byincomeegret
t
fessedbyinconet
pricesarefixed Utilityisfixed
income
inincome f priceofleisure
Tdemandforleisure Ierististeisenstinising
purelytummy
onlyforthosealreadyworking
