Slajd 1

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Different types of labour
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Contents

• Productivity differences
• Discrimination
• Trade unions

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1.Productivity differences
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Human capital is the stock of expertise
accumulated by a worker to enhance future
productivity.
It is result of past investment in order to raise
future incomes.
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present value o benefits gt present value of
costs
Educational investment in improving human capital
by further education makes sense.
present value o benefits lt present value of
costs
Higher education is a bad investment, it is
better to start work immidiately.
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Firm- specific skills raise a workers
productivity only if he or she works for the
particular firm.
General skills enhance productivity in many jobs,
not just the current one.
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The worker pays for the training by working for
less than his immediate marginal product.
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Signalling theory says it could be rational to
invest in costy education even if education adds
nothing directly to a workers marginal product.
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Signalling is the decision to undertake an action
in order to reveal inside information.
Screening is the process of learning inside
inside information by observing differences in
behaviour.
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Education raises directly with the productivity,
it is good for society. It raises the amount of
output that the labour force can eventually
produce.
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2.Discrimination
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MALE VS.
FEMALE
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WOMEN
3/2
MEN

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UK annual pay, 2000
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• Moreover
• men faster get promoted
• men are quicker trained and in broad job
  cathegories

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Discrimination is the different treatment of
people whose relevant characteristics are
identical.
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Single, 30- year old women earn 90 as much as
men.
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THE TRICK
Employer may evaluate real intensions by offering
young woman age- earning profile.
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Some facts
In 1971 there was much more male than female
students.
Now, this generation is in its 50s. Most sex
comparisons are for unequally educated people.
By 1998 the gender gap has gone. It is possible,
that payment will slowly start to equalise.
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RACIAL DISCRIMINATION
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We can devide on white and non- white.

• Non- white
• earn less than white
• have much flatter earning profiles
• are less likely to achieve promotion
• have smaller chances of rising their earnings

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STATISTICS
UK, 2001
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REASONS?

• lower payoff to education
• discriminated on many social levels
• usually lower education
• potential employers consider them less productive
  and trained

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It is hard to draw the line between
discrimination in the labour market and elsewhere
in society!
Changes on the labour market occur as slowly as
in the society.
Unless society removes the differencies in
characteristics, opportunities and behaviour of
these groups, the discrimination will exist.
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3.Trade unions
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Trade unions are worker organizations set up by
workers to affect pay and working conditions.
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The traditional view of unions is that they
offset the power that a firm enjoys in
negotiating wages and working conditions.
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A closed shop is an agreement that all a firms
workers will be members of a trade union.
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• Unions secure higher wages for their members for
  two distinct reasons
• they restrict labour supply, trading off lower
  employment in the industry for higher wages
• they negotiate changes in working practices that
  raise productivity and channel part of this gain
  to the workforce

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One reason for strikes is that one party
misjudges the others position. As the strike
proceeds, each side learns the needs of the other
strike.
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What should you know?

• Reasons and results of differences in workers
• Investment in human capital
• How signalling reveals differences in workers
• Forms of discrimination
• How trade union

• raise wages
• improve conditions of workers

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We wish you good luck in your looking for a job!
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Thank you very much for your attention!
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