lump of labour

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The view that there is a fixed total amount of employment available. If this were true, it would be correct to argue that limiting hours worked would create more jobs, and making the elderly retire early would create jobs for the young. This view ignores the possibility that the demand for labour may depend on the relation between wage rates and the value of work to employers. Allowing for this, preventing employers from employing the most experienced workers, or from employing people for longer hours per week, might actually reduce total employment, by lowering the value of the work employers get for the wages they offer.

Subjects: Economics.

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