Labor Demand
Overview
The supply of labor in an economy follows the normal rules of
Supply and Demand.
Modeling
The supply of labor, here denoted L, is a function of the population, N, and the prevailing wage, W.
{% L^s = L^s(N,W) %}
In general, it is assumed that the amount of labor goes up as the population goes up and also as the level of wages increases.
- {% \frac{\partial{L}}{\partial{N}} > 0 %}
- {% \frac{\partial{L}}{\partial{W}} > 0 %}
Wages are typically stratified by industry, When viewed from the perspective of a given industry
{% L^s = L^s(N, W, W^a) %}
