Work for all those who want it? Why the neoclassical labour supply curve is an inappropriate foundation for the theory of employment and unemployment
AbstractThis paper questions the usefulness of the neoclassical labour supply curve as a factor in the theory of employment and unemployment. This curve rests on the false premise that workers can 'choose' whether to work or not, and gives credence to the idea that all unemployment constitutes chosen leisure. Despite this, it was used by Keynes to define the point of full employment. This contributed to the misleading impression that the level of full employment is determined by psychological factors. Challenging this view, Joan Robinson sought to integrate a wider set of issues into the theory of labour supply, in order to build a different (non-neoclassical) foundation for Keynes's theory of effective demand. Drawing upon Robinson, the paper argues against the use of the neoclassical labour supply curve within macroeconomic analysis. Copyright 2006, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Cambridge Journal of Economics.
Volume (Year): 30 (2006)
Issue (Month): 3 (May)
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- Sawyer, Malcolm & Spencer, David, 2008. "On the definition of involuntary unemployment," The Journal of Socio-Economics, Elsevier, vol. 37(2), pages 718-735, April.
- Nadia Steiber, 2008. ""How Many Hours Would you Want to Work a Week?": Job Quality and the Omitted Variables Bias in Labour Supply Models," SOEPpapers on Multidisciplinary Panel Data Research 121, DIW Berlin, The German Socio-Economic Panel (SOEP).
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