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Forming the Modern Labour Market Economics: On the Role of Institutionalist Theories
[Utváření moderní ekonomie trhů práce: neoklasické paradigma s institucionálními teoriemi]

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  • Dagmar Brožová

Abstract

The growing role of institutions and their influence on the labour market outcomes, i.e., wage rates and labour allocation, has been among the most significant characteristic features of labour markets in recent decades. The labour market economics built its paradigm on the principles of marginalism, which brought suitable instruments for the analysis of market agents' individual decisions capable of achieving effective solutions. Smith's "invisible hand" has gradually been limited by institutional interventions - by governments, corporations and trade unions with government legislation, corporate personnel policies and collective bargaining. The expanding regulatory interventions in the labour market and the effort to explain the reality leads inevitably to the fact that the modern labour market economics incorporates more and more institutional theories.The contribution outlines the gradual invasion of neoinstitutional topics and theories into the neoclassical labour market paradigm and it analyses the differences between the neoclassical and institutional interpretation of labour market functioning. It presents the recent discussion on the consequences for the labour market economic theory and formulates a conclusion about the modified labour market economic paradigm.

Suggested Citation

  • Dagmar Brožová, 2016. "Forming the Modern Labour Market Economics: On the Role of Institutionalist Theories [Utváření moderní ekonomie trhů práce: neoklasické paradigma s institucionálními teoriemi]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2016(6), pages 56-68.
    • Handle: RePEc:prg:jnlaop:v:2016:y:2016:i:6:id:562:p:56-68
    DOI: 10.18267/j.aop.562
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    More about this item

    Keywords

    modern labour economics; neoclassical theory; neoinstitutional theory; dual market theory; theory of efficiency wages; labour market institutions;
    All these keywords.

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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