劳动经济学课件

,Click to edit Master title style,Click to edit Master text styles,Second Level,Third Level,Fourth Level,Fifth Level,Jump to first page,2-,*,Chapter 2,The Theory of Individual Labor Supply,Chapter 2The Theory of Individ,1.The Work-Leisure Decision:Basic Model,劳动经济学课件,Individuals choose between,work,and,leisure,.,Work is time spent on a paying job.,Leisure includes activities where one is not paid.,Education,Rest,Work within the household,Assumptions,Individuals choose between wor,Indifference Curve,Leisure Hr,Income/day,24,0,The indifference curve shows work and leisure combinations that yield the same amount of total utility.,More hours of leisure implies fewer hours of work,.,24,0,Work Hr,Indifference Curve Leisure,Negative slope,To keep the level of utility the same,if one get more leisure,some of income must be given up.,Convex to origin,With,low,hours of leisure,individuals are willing to give up a,large,amount of income to get 1 more leisure hour.,With,high,hours of leisure,individuals are willing to give up a,small,amount of income to get 1 more leisure hour.,Indifference Curve Properties,Negative slope Indifference Cu,Marginal Rate of Substitution,Leisure,Income/day,3,4,9,8,24,0,4,1,The marginal rate ofsubstitution(MRS)is the amount of income one must give up to compensate for 1 more hour if leisure.,At 3 hours of leisure(21 hours of work),one must give up 4 units of income to compensate for 1more hour of leisure,.,24,0,Work,At 8 hours of leisure(16 hours of work),one must give up 1 unit of income to compensate for 1 more hour of leisure.,The MRS falls as one moves southeast along an indifference curve.,Marginal Rate of Substitutio,Indifference Map,Leisure,Income/day,24,0,Curves further from the origin indicate higher utility.,I,1,I,2,I,3,L,2,L,1,Y,2,Y,1,Combination L,2,Y,2,is preferred to combination L,1,Y,1,since one gets both more income and more leisure.,A person will maximize utility by getting to the highest,attainable,indifference curve.,Indifference MapLeisureInco,Work-Leisure Preferences,Leisure,Income/day,24,0,“Leisure lovers”place a high value on leisure.The have a steep indifference curve.They are willing to sacrifice a large amount of income to get a small increase in leisure.,I,1,I,2,“Workaholics”place a low value on leisure.The have a flat indifference curve.They must be given a large increase in leisure to compensate for a small decrease in income,.,I,A,I,B,Work-Leisure PreferencesLei,Budget Constraint,Leisure,Income/day,24,0,The budget constraint shows the combinations of income and leisure that a worker could get given a wage rate.,$120,At a wage rate of$5,a worker could get a maximum income of$120 per day($5/hour*24).,At a wage rate of$10,a worker could get a maximum income of$240 per day.,At a wage rate of$15,a worker could get a maximum income of$360 per day.,$240,$360,The slope of the budget constraint iswage rate.,Budget ConstraintLeisureInc,Utility Maximization,Leisure,Income/day,24,0,The optimal or utility maximizing point is where the budget constraint is tangent to the highest,attainable,indifference curve,(,U,).,$240,I,1,I,2,I,3,16,$80,U,At,U,the MRS(slope of the indifference curve)is the equal to the wage rate(slope of the budget constraint),At,B,the MRS is greater than the wage rate.The individual values leisure more than the wage rate.,B,A,At,A,the MRS is less than the wage rate.The individual values leisure less than the wage rate.,Utility MaximizationLeisure,Backward Bending Labor Supply Curve,Hours of Work,Wage Rate,24,0,For a given person,hours of work may increase as the wage rate rises.,8,10,$10,$25,If the wage rate rises from$10 to$25 per hour hours of work rises from 8 to 10 hours per day.,Above$25 per hour,hours of work fall.,S,L,The backward bending labor supply curve is the result of theincome and substitution effects of a wage change.,Backward Bending Labor Supply,Income Effect,The change in desired hours of work resulting from a change in income,holding the wage constant.,Leisure is a normal good,so higher income implies a desire for more leisure(fewer hours of work).,For a wage,increase,income is raised and so the income effect lowers desired work hours.,Income Effect,Income Effect Income Effect,Substitution Effect,The change in desired hours of work resulting from a change in the wage rate,holding income constant.,A higher wage rate raises the relative price of leisure.,For a wage,increase,the substitution effect raises desired work hours.,Substitution Effect,Substitution Effect Substitut,For Wage Increases,If substitution effect income effect,then hours of work rise.,If income effect substitution effect,then hours of work fall.,For Wage Decreases,If substitution effect income effect,then hours of work fall.,If income effect substitution effect,then hours of work rise.,Net Effect,For Wage Increases Net Effect,Income and Substitution Effects,Leisure,Income/day,24,0,At a wage rate of$10/hour,the optimal hours of leisure is 16(8 hours of work)at point,U,1,.