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Altman, M. The Importance of Context for the Development of Labour Market Theory and Policy. Journal of Contextual Economics – Schmollers Jahrbuch, 141(1–2), 109-127. https://doi.org/10.3790/schm.141.1-2.109
Altman, Morris "The Importance of Context for the Development of Labour Market Theory and Policy" Journal of Contextual Economics – Schmollers Jahrbuch 141.1–2, 2021, 109-127. https://doi.org/10.3790/schm.141.1-2.109
Altman, Morris (2021): The Importance of Context for the Development of Labour Market Theory and Policy, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 141, iss. 1–2, 109-127, [online] https://doi.org/10.3790/schm.141.1-2.109
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The Importance of Context for the Development of Labour Market Theory and Policy

Altman, Morris

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 141 (2021), Iss. 1–2 : pp. 109–127

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/schm.141.1-2.109
Language
English
Pages
19
Keywords

Author Details

Morris Altman, School of Business, University of Dundee, 1 – 3 Perth Road, DD1 4HN Dundee, Scotland, UK.

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Abstract

Labour market theory underlies much of economic analysis with implications for theory and policy. I argue that conventional approaches to the labour market as well as more modern approaches represented by aspects of behavioural labour economics and Keynesian economics are often decontextualized from how individuals actually behave and the institutions affecting their behaviour. Building labour market models with empirically valid assumptions about human behaviour and individuals’ decision-making environment casts doubt on key core predictions of contemporary economics, such as: higher wages are bad for the economy; improvements in conditions of work and social support are economically damaging; lower real wages are a prerequisite to increasing macro employment, and workers prefer leisure over work. These models also challenge the view put forth by heuristics and biases type behavioural economists that workers behave irrationally, are biased, and therefore make decisions that are sub-optimal, damaging to themselves and the economy at large.

Table of Contents

Section Title Page Action Price
Morris Altman: The Importance of Context for the Development of Labour Market Theory and Policy 109
Abstract 109
1. Introduction 109
2. Decontextualized Economic Theory 111
3. Income-Leisure Choice in Context 113
4. Higher Wages and the Firm 117
5. The Psychology of Unemployment 109
6. Conclusion 109
References 109

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