Lecture 3 notes
The Hours of Work Decision
Individual will choose consumption and leisure to maximize utility
Optimal consumption is given by the point where the budget line is tangent to the
At this point the Marginal Rate of Substitut
Measuring the Labor Force
Current population survey (CPS)
Labor Force = Employed + Unemployed
LF = E + U
Size of LF does not tell us about intensity of work
Labor Force Participation Rate
LFPR = LF/P
P = civilian adu
Introduction to Labor Economics
What is Labor Economics?
Labor Economics is the study of the markets in which labor services are
exchanged for wages.
How labor differs from other economic resources?
1. Labor is tied to its owner
2. There is empl