[经济学]SEM2 Weeks 2 and 3 lecture slides.pptVIP

* * 13 * * 13 * * * 13 * * * * * * 15 * * * * 15 * * 4 * * * * * * * 4 * * * 5 * * 5 * * * * 5 * * * * 5 * * * * * 5 * * * * 6 * * 6 * * * 7 * * * * 10 * * 10 * * * * 12 * Wages under perfect competition Equality and inequality of wages under perfect competition equality will exist when: workers have identical abilities there is perfect knowledge there is perfect mobility of labour all jobs are equally attractive to all workers wages determined entirely by demand and supply Wages under perfect competition In practice, inequality of wages between markets will persist under perfect competition jobs are not identical workers’ abilities are not identical workers are not perfectly mobile Factors that contribute to poverty under perfect competition include lack of skills that increase productivity participation in labour markets with high level of supply/ low demand working in contracting industries Theory of the Distribution of Income Wage Determination in Imperfect Markets Wages in imperfect markets Firms with monopsony power in employing labour MCL W effects on wages and employment O Q of labour ￡ MRPL ACL o W (supply curve) Q1 MCL Monopsony W1 Q2 W2 Profit maximised where MCL = MRPL Perfectly competitive equilibrium Wages in imperfect markets Other labour market imperfections Imperfect information Persistent disequilibrium Non-maximising behaviour Discrimination Wages in imperfect markets Gender inequality of earnings Average gross hourly earnings for full-time adult UK employees (￡ per hour): 1970-2008 Average gross hourly earnings for full-time UK employees on adult rates (2007) Wages in imperfect markets Conclusions: who are the rich and who are the poor? Factors that contribute to poverty in imperfect labour markets lack of economic power, not belonging to a strong union ignorance of better job opportunities lack of will or ability to search for a better job discrimination Theory of the Distribution of Income Capital Capital Factor prices versus the price o