1. FH Düsseldorf 2013-2014 Pablo Agnese Labor & Personnel Economics pablo.agnese@fh-duesseldorf.de www.pabloagnese.com (23.32 00.43)

2. 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 Unit 6: Personnel Economics Outline

3. Goals Different approaches / Philosophical background Some technical stuff  Some challenging discussions

4. Main textbooks: McConnell, Brue, Macpherson Ehrenberg, Smith Kaufman, Hotchkiss Lazear, E., Personnel Economics in practice Also: W. Block (Austrian School) Literature

5. Grading Test (80%) Weekly practices (20%) Monitoring: email exchange and/or tutorials

6. 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 Unit 6: Personnel Economics

7. 1. Introduction 1.1 Why labor economics? Socioeconomic reason Quantitative reason Particular features (?) 1.2 Division of labor and comparative advantage Task specialization Efficiency Human capital and technological development Price system Negative effects?

8. 1.3 Positive and normative economics Positive economics identifies two assumptions: – Scarcity – Rationality Normative economics looks at two types of transactions: – Beneficial exchange (voluntary) – Redistribution (involuntary) Intervention v. non-intervention

9. The labor market allows mutually beneficial exchanges between employers and employees Sometimes this might prove difficult Market failures and / or government failures : Ignorance or lack of information Externalities Public goods Regulations Price distortion

10. 1.3 Efficiency and Equality No single set of Pareto-efficient transactions “Social goal” What set is the most equitable? Decisions on equality  political matter Define a subjective standard of justice Economics is NOT a zero sum ​​game!

11. Summary of 1 st class Why labor economics? Division of labor and comparative advantages Positive and normative: role for government? Market failures: role for government? Efficiency and equality: role for government? Say’s law

12. We should ask then: Why should we specialize? - E.g. Hunters and collectors - People have different natural skills (sports, risky jobs) - Education - Cooperation What are the obstacles? - Coordination How does the capitalist system solve these problems? - Price system (commodities and labor!) - Prices/wages  productivity of firms/disutility of work