Wage Elasticity of Labor Demand Measure

From GM-RKB
(Redirected from Labor Demand Elasticity)
Jump to navigation Jump to search

A Wage Elasticity of Labor Demand Measure is a price elasticity of demand measure that applies to labor demand changes with respect to labor wage changes.



References

2013

  • http://elearning.la.psu.edu/econ/315/lesson-4/elasticity-of-labor-demand
    • QUOTE: In the realm of labor economics, we are interested in how responsive an employer's demand for labor is to the price (wage) of labor. More specifically, we look for the relative change in employment level for a relative change in the wage:
      Elasticity of labor demand is equal to the percent change in employment divided by the percent change in wage.

      Notice that because demand curves are downward-sloping, this calculation will always be negative. If the wage goes up, employment will go down (all else constant.) If the wage goes down, employment will go up (all else constant.)