• 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

2. Definitions, facts, and trends

Markets: buyers & sellersLabor market: employers & employees

Employers demand Employees supply

Labor market of doctors, engineers, professors, etc.

Both employers and employees can be in several markets at the same time

EAP = LF + out of LF

LF: actively (E+U) participate in the labor market; out of LF: retirees, voluntary unemployment, “stigmatized o marginalized”LF = E + U U = LF – E

u(%) = (U/LF)*100

Another indicator: PR (%) = (LF/EAP)*100

2.1 Labor force and unemployment

2.2 Labor market trends

• Different patterns of u(%): US & UK v. EU– Why? Institutions, shocks, interactions, etc.

• In US the PR (%) stayed around 60-66% in last 60 years

• Men: from 85% to 70%; Women: from 35% up to 60%

• Another trend: growth of services sector (education, health, leisure, finance, etc.) 3-sector hypothesis

• Workers are better trained now (“recycling”)