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  • Seminar 1 - Labor Demand and Supply - Search Theory

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    Ole Rogeberg
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    There will be 6 seminars. Three of these (number 1, 4 and 6) will be led by Ola Lotherington Vestad. Each seminar will use the submitted solutions as a starting point. If you havent been assigned a seminar question, we recommend you prepare by reading through the questions and think through how you would have solved it.

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    There will be 6 seminars. Three of these (number 1, 4 and 6) will be led by Ola Lotherington Vestad. Each seminar will use the submitted solutions as a starting point. If you havent been assigned a seminar question, we recommend you prepare by reading through the questions and think through how you would have solved it.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    527 views2 pages

    Seminar 1 - Labor Demand and Supply - Search Theory

    Uploaded by

    Ole Rogeberg
    There will be 6 seminars. Three of these (number 1, 4 and 6) will be led by Ola Lotherington Vestad. Each seminar will use the submitted solutions as a starting point. If you havent been assigned a seminar question, we recommend you prepare by reading through the questions and think through how you would have solved it.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    ECON4715AUTUMN2011Seminar1OlaLotheringtonVestad

    Abouttheseminars:Therewillbe6seminars.Threeofthese(number1,4and6)willbeledbyOla LotheringtonVestad(o.l.vestad@frisch.uio.no),whiletheremainingwillbeledbySimenMarkussen (simen.markussen@frisch.uio.no). Checkcarefullytoseeifyourgrouphasbeenassignedanyoftheseminarquestions.Ifso,please coordinatewithyourgrouponhowandwhenyouwillsolvetheseminarquestionyou`vebeenassigned. Sinceeachseminarwillusethesubmittedsolutionsasastartingpoint,itisimportantthatyouhandin afinishedsolutionbyThursday12:00(lunch)atthelatest. Sendthesolutionstoo.l.vestad@frisch.uio.noordeliverthemtotheFrischCentreatForskningsparken (useOla`smailshelf)(5minutesfromSVbuilding,seemapathttp://g.co/maps/utzjw). Ifyouhaven`tbeenassignedaseminarquestion,wewouldrecommendyoutopreparebyreading throughthequestionsandthinkthroughhowyouwouldhavesolveditandwhatconcepts,theories, diagramsetc.youwouldhaveused.

    Part1Labordemand(GroupA)
    1. Imaginethataminimumwagewasenacted.Show(theoreticallyusinggraphicalanalysisand/or mathematics)anddiscusswhateffectsthishas a. Intheshortrun b. Inthelongrun c. Forunskilledlabor d. Onhoursworkedandnumberofemployed 2. Adjustmentcosts a. Explaintheconceptofadjustmentcosts b. Whatisthedifferencebetweentheadjustmentcostanalysisassumingadeterministicand stochasticenvironment? c. Whatarethemainresultssofarfromtheliterature?

    Part2Laborsupplyandlaborsearch(GroupB)
    1. Wagesincreaseandweareinterestedintheeffectsontheaggregatelaborsupply.Showtheeffects ofthewageincreaseon a. Hoursworkedforaworkingindividual b. Numberofworkers c. Householdproduction 2. Discusstheseeffectsandwhattheprobablenetoutcomewouldbeontheaggregatelaborsupply. 3. Inthejobsearchmodel: a. Showthattheoptimalreservationwageinthebasicjobsearchmodel(equation6,CZpage 113)istheonethatmaximizesVu.

    b. Calculatetheexpressionsofthecomparativestaticsofthebasicmodelthatarediscussed onCZp.113anddiscussthesigns.

    Part3Humancapital(GroupC)
    1. Inclass,weanalyzedthesignalingmodelwhenu(R,s,h)=R(s/h).Assumethatthereisan alternativetoworkingthathasutilityd,sothatu(R,s,h)=R+d(s/h),whereRequalseithertheir marginalproductivity(iftheywork)or0(iftheydon`t),whiled(valueofoutsideoption)is normalizedat1. a. Whatcharacterizestheseparatingequilibriumafterthisadjustment? b. HowdoesE(h)theexpected/averagevalueofhinthepopulationinfluencethe outcomedefinedbythesolutionina? 2. Someonetellsyouthatpeoplewithhighereducationaresmarter,earnmoremoney,andlive longerliveswithbetterhealth.Howcouldthisbeexplainedbythehumancapitalandthe signalingmodelrespectively? 3. Ifyouwant,youcanbecomeanentrepreneurandstartyourowncompanyandyoudon`t needtohaveanyspecificlevelofeducationtodoso.Whatwouldthehumancapitalandthe signalingmodelrespectivelyimplyabouttheeducationlevelofsuccessfulentrepreneurs(i.e. aretheylikelytobemore,lessorequallyeducatedcomparedtopeerswithsimilarearningsand earningsrisks)?Canyoufindanyevidence/numbersregardingwhatisactuallythecase?

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