Overview
Labor market equilibrium is a crucial concept in economics that describes the state where the supply of labor meets the demand for labor, resulting in stable wages and employment levels. Understanding this equilibrium helps analyze how various factors, such as government policies and economic condit...
Key Terms
Example: An increase in wages typically increases labor supply.
Example: A growing economy usually increases labor demand.
Example: At an equilibrium wage of $15/hour, the number of job seekers matches the number of available jobs.
Example: A recent graduate looking for their first job is frictionally unemployed.
Example: Workers in coal mining may face structural unemployment due to a shift to renewable energy.
Example: During an economic downturn, many companies lay off workers, leading to cyclical unemployment.