Most analyses stopped there. We showcase studies that highlight the central advantages of this methodology, which include: (i) using economic theory to design the null and alternative hypotheses; (ii) engineering exogenous variation in real world economic environments to establish causal relations and learn about the underlying mechanisms; and (iii) engaging in primary data collection and often working closely with practitioners. Economics Traditionally, labor economics focused on the labor market rather than looking inside the “black box” of firms. Compensation in this context is not limited to salary and benefits; rather, it includes any aspect of work that influences one’s desire to enter, stay or leave, such as location, work schedule, or the intrinsic rewards that one derives from teaching. If there were free entry and exit of workers in and out of labor markets, the national economy would eventually be characterized by a single wage. Successful Implementation of Corporate Governance Mechanisms in Banks. Greater clarity on “representativeness” can, in our opinion, be also achieved if future investigators are more precise about which field environment their experiment is intended to represent. Perhaps the most widespread concern with lab experiments is the representativeness of the laboratory population relative to the field population of interest; this concern seems particularly acute when discussing lab results that are hard to explain without some recourse to “non-standard” preferences. How do skills, education, experience, etc. Copyright © 2020 Elsevier B.V. or its licensors or contributors. Public Sector Economics: public transport, health care system, pension scheme, edu-cation, welfare, etc. Microfinance/Microcredit in the Developing Countries. Nevertheless, even in a world apparently dominated by the market, a large amount of household production is necessary. The theory of labor demand shows that the wage equals the value of marginal product of labor in a competitive market. In Section 5 we discuss some of the factors determining HRM, focusing on risk, competition, ownership, trade and regulation. This vast literature includes a number of noteworthy “success stories”, including the use of laboratory experiments as testing grounds for proposed institutional innovations—in particular, matching mechanisms for professional workers, and arbitration systems in public sector union bargaining—that are subsequently used to organize the actual pricing and exchange of labor. Through an ‘invisible hand,’ workers who search selfishly for better opportunities accomplish a goal that no one in the economy had in mind: an efficient allocation of resources. When the dictator first takes over, he sees that the wage in the North exceeds the wage in the South. • A look at the various diﬀerences between the UK and the Middle East: Taxation • Rail transport in Europe • Recent railway accidents and how it has aﬀected the railway industry The economic impacts of strikes. You may, however, narrow down your topic to something like “The labor market in Italy” or “What role does demography play in the economic growth of India?” A narrower topic may be a good choice if you know where to get a lot of specific information on it. For instance, Campbell and Cochrane (1999) show that a particular form of habit dependence (known as external habits) is required to explain a variety of dynamic asset pricing phenomena, including the equity premium puzzle. Effects of foreign direct investment on economic growth: a case study. Opportunity cost. Economics can be defined as the social science that analyses the way choices people take among the alternatives available to […]. Institutional aspects and fiscal outcomes of U.S. Municipal governance. flexibility of working, job rotation), team-working (e.g. affect wage? Write a rough draft after completing an outline. A possible explanation for the tendency by older individuals in fast growing economies to keep saving is that their desired consumption level is heavily influenced by the low standard of living they were used to in their early years. While much remains to be learned about the effects of compensation systems on worker behavior within firms, it is perhaps worth gauging our progress by considering the state of knowledge on this topic some 15 years ago in the words of some of the main contributors (emphasis added): “There is a large and growing interest in the economic theory of the internal workings of firms. In the literature, the importance of these institutional features for structural unemployment is tied particularly to their implications for demand for and supply of labor, price and wage formation, and the efficacy of search and matching processes in the labor market. This wage gap implies that the value of marginal product of labor is greater in the North than in the South. The labor economic theory of supply and demand suggests that teachers will enter and stay in teaching (or a particular position) if it is the most attractive activity available based on overall compensation (Guarino et al., 2006). Office Hours: By appointment. …At this point, there is hardly any feature of internal labor markets that cannot be given some logical explanation using the right combination of uncertainty, asymmetric information and opportunism. We therefore consider field experiments related to the accumulation of human capital, the demand and supply of labor, and behavior within firms, and close with a brief discussion of the nascent literature of field experiments related to household decision making. How does immigration affect the labor market? Topics in Labor Economics. It is useful to distinguish between two main analytical approaches to equilibrium unemployment: stock approaches and flow approaches. It’s called rough and that means you shouldn’t worry about spelling or grammar mistakes when composing it. The flow of Southern workers into the North would raise the Southern wage and depress the Northern wage. © 1999 Elsevier Science B.V. All rights reserved. In the language of economics, labor and capital are the two factors of production. Workers respond to regional differences in economic outcomes by voting with their feet. individuals or group incentive/contingent pay) and also the system of appraisal, promotion and career advancement. Boersch-Supan et al. The dictator picks a worker at random. Family labor supply is rarely considered within large OLG models. The reason for this simplification, of course, is that the individual decision problem becomes much more complex if one allows for different labor supply decisions.c And yet, labor supply is key to determine the extent to which certain demographic trends (such as the aging of the population) trickle into implications for factor prices and, ultimately, for the welfare of different generations. An Economic and social impact of venture capital and private equity in the EU. The concept of ‘equilibrium unemployment’ is an example of the latter.).
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