Aspects of Labor Demand

This part of the book looks at the importance of labor demand for the study of economics. It examines in detail various aspects of labor demand. There is more to the study of labor demand than the neoclassical theory of the comparative statics of employers's responses to marginal changes in product demand and factor prices, the text states. The study of the responses of employment and hours to non-marginal changes — large shocks that are not readily analyzed using the standard mathematical tools — must belong in the subfield of labor demand. So too, examining the time paths of adjustment of employment and hours to both marginal and non-marginal shocks — the comparative dynamics of employment and hours — deserves inclusion.