ECON 3240 Lecture Notes - Lecture 4: Opportunity Cost, Washing Machine, Combined Oral Contraceptive Pill
Document Summary
Lecture 4: labour supply over the life cycle. Birth cohort effects: changing retirement age, prevalence of higher education, married women in workplace, e. g. women born in 1941-45 have different lifetime work patterns than women born in 1956-60, + different economic circumstances, social attitudes. Static setting = how much labour a person will supply now, given utility function & budget constraint. Labour supply responds to expectations about future wage path not just wages in the present. Reponses to wage changes depend on whether or not wage change was expected: e. g. how does labour response change when wage changes. Individuals live for n periods, consumer income & leisure in each (look @ it across time period rather than just now ) U = u (c1, c2, c3, , cn, l1, l2, l3, ln) Constraint: wages diff in diff periods: w1, w2 wn, borrowing & saving @ interest rate r.
