Labor Market

 What's the opportunity cost? when wages go up working is relatively more attractive, but there is an income effect, you are richer, when people get richer they want more leisure time backward-bending labour supply curve is possible as wage goes up employers demand less labour can be a slow reaction for it to happen but it will

Minimum wage can lead to unemployment, it's an example of a price floor. If you make wages higher people will be more attracted to jobs but firms will lower their demand for labour. eXCESS supply

Unemployed = not employed and looking for work (i.e. in labour force)

•The labour force = employed + unemployed

•The labour force participation rate = labour force / working age population* ~65%

•The unemployment rate = unemployed / labour force ~4,3%

•The employment rate = employed /working age population

Short-term unemployment for people looking to switch jobs (frictional)–Actually good to have a little of this

•Long-term unemployment from people unable to find employment (structural) –Not good

•“Full” employment = all unemployment is frictional; hard to quantify ... 5%? 4%?

•By convention “long term” : >1 year

Increase in minimum wage could reduce teenage employment, in ireland minimum wage increases, hours may be reduced but it's a controversial matter

Policy makers need to balance costs and benefits

•Underlying concern of conservatives in UK, US, and elsewhere is that immigration is bad for locals

•Is this concern supported by empirical evidence?•Politically, debate tends to be confused by issues like asylum seeking, refugees etc

in the short run, will shift labour supply out to the right, equilibrium moves down the demand curve, wages will fall

They bring benefits, demand for goods and services, pay taxes, bring skills (cuisine)

Immigrants are healthier on average (hospital argument)

Wage effects: in uk doesn't really have a negative affect, but depends on where you are, in general no major negative effect

if both supply and demand increase, effect on wages is unclear