Excess Supply in the Spot Market for Labor
نویسنده
چکیده
A distinguishing feature of labor services is that they are immediately perishable. This paper explores the implications of immediate perishability for the market for homogenous labor services that are sold in a centralized exchange. The analysis sheds light on the nature of unemployment. The paper also explores implications for the role of labor cartels and firms in providing workers an alternative to selling their labor services on the spot market. Cartels can be Pareto superior to competition in the spot market because they organize labor to reduce excess supply.
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