Discuss the view that imperfections in the labour market are the main cause of employment?(economic)?

Question

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Answer 1

Nonsense. Unless, of course, you define a perfect labor market as one in which there is no unemployment.

The fact is that no one in his right mind would want to work in what economists would call a "perfect" labor market and no society could survive for long with such a market. So while there are plenty of "imperfections" to blame, doing so is meaningless.

For example, all the classical economic models work assume the world is static - they make no provision for jobs changing, people either becoming more productive as they get more experienced, or becoming less productive as their skills are no longer needed because of new technology.

Or consider the wage structure: classical economics is perfectly happy proving that full employment is possible, if only workers would accept wages that no one could survive on. (Slave owners had at least some interest in the long term health of their slaves; economist employers don't as when a worker gets too weak to work, another can always be found to work at the same pay rate.)

http://en.wikipedia.org/wiki/Labor_marke...