3250:200 Lecture Notes - Lecture 19: Demand Curve, Human Capital, Externality
16 Nov 2017
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Microeconomics 04 / 20 / 2017 chapter 19. Greater ability or effort often command higher pay ; these traits increase workers" marginal products, make them more valuable to the rm. W = p x mpl human capital- the accumulation of investments in people, such as education, on the job training, and experience. Shifts in labor demand labor demand curve = vmpl. Anything that increases mpl at each l will increase vmpl and shift labor demand curve upward. Human capital affects productivity, and thus labor demand and wages. Higher human capital increases the productivity of workers, increases the demand for labor, and raises wages. Dif cult to determine which hypothesis better explains the widening earnings gap ; probably both are important: international trade. Rising exports of goods made with skilled labor, rising imports of goods made with unskilled labor: skill-biased technological change (sbtc) New technologies have increased demand for skilled workers, reduced demand for unskilled workers.
