Abstract
Manpower planning has, at its core, the problem of mismatch between labour supply and demand, that is unemployment. Consequently, a better understanding of the manpower planning problem can be gained by examining theories about the determination of unemployment. Therefore, this chapter overviews some of the leading strands of thought that have attempted to explain, among other things, the economic causes of unemployment. This is an ambitious undertaking since the field is vast and, therefore, the approach taken has been eclectic and does not pretend to be exhaustive. The main choice has been to include those theories, and theoreticians, that have focussed upon unemployment rather than economic theory per se. So, Marx, Keynes and Lewis are included while, for instance, Sen, who focussed mainly on poverty and entitlements, Myrdal, of Asian Drama fame, and Tinbergen, who focussed upon Computerized General Equilibrium (CGE) models, are not. Moreover, the discourse has been hampered because economists rarely agree among themselves on what is the most appropriate theory. For example, in a discussion on the Nobel prize winners for economics, Little2 stated:
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Notes
3 Clearly Keynes’ General Theory of Employment was a major exception.
4J Kornai (1980) ‘The dilemmas of a socialist economy: the Hungarian experience’, Cambridge Journal of Economics, (Cambridge), No. 4, pp. 147–57.
6 A. Smith (1937) The Wealth of Nations, New York, Random House, p. 69.
7 P. Samuelson (1975) Economics, New York, McGraw-Hill (8th ed.), p. 551.
9 This is discussed in M. Hopkins et al. (1976) ‘Evaluating a basic needs strategy and population growth’, in International Labour Review, Geneva, ILO, May.
10 E. Hagen (1968) The Economic Theory of Development, Mexico/Buenos Aires, Centro Regional de Ayuda Tecnica.
D. Ricardo (1937) The Principles of Political Economy and Taxation, London, Dent, 1937. op. cit.
Celso Furtado (1979) Teoria Politica Del Desarrollo Economico, Mexico, Siglo XXI (8th edn).
14 R. Eckaus (1955) ‘The factor proportions problem in underdeveloped areas’, in American Economic Review, Nashville, Tennessee, September. Major Theories of Labour Market Mismatch 53
15 E. Domar (1968) Essays in the Theory of Economic Growth, New York, Oxford University Press; see also R. G. D. Allen (1968) Macro Economic Theory, London, Macmillan.
16 R. Solow (1956) ‘A contribution to the theory of economic growth’, in Quarterly Journal of Economics, Cambridge, Mass, February.
17 Idem (1980) ‘On theories of unemployment’, in American Economic Review, Presidential address, Nashville, Tennessee, March.
18 A. C. Pigou (1945) Lapses from Full Employment, London, Macmillan.
19 Among many other places this is argued forcefully by Nobel Laureate L. R. Klein in The Keynesian Revolution, New York, Macmillan, 1961 (first published in 1947).
21 John Maynard Keynes (1936) The General Theory of Employment, Interest and Money, London, Macmillan; New York, St. Martin’s Press, Chapter 2.
23 J. A. Schumpeter (1931) ‘The present world depression’, in American Economic Review, Nashville, Tennessee, XXI: 179.
J. Schumpeter (1950) Capitalism, Socialism and Democracy, New York, Harper (3rd edn).
25 T. Schultz (1979) ‘Investment in population quality throughout low-income countries’, in P. Hauser (ed.), World Population and Development: Challenges and Prospects, Syracuse
26 J. Stiglitz (1986) ‘The new development economics’, in World Development, 14(2) February.
29 See, for example, P. Sweezy (1946) ‘What has Keynes contributed to the analysis of capitalism?’, in Science and Society, New York, October.
30 See P. Kenway (1980) ‘Marx, Keynes and the possibility of crisis’, in Cambridge Journal of Economics, Cambridge.
V. V. Bhatt (1974) Sterility of Equilibrium Economics, Washington, DC, Economic Development Institute, World Bank.
32 A. Berry and R. Sabot (1978) ‘Labour market performance in developing countries: A survey’, in World Development, Oxford, November–December.
33 W. B. Reddaway (1963) ‘The economics of underdeveloped countries’, in Economic Journal, London, March.
34 A. Wood (1994) North–South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World, Clarendon Press, Oxford.
35 J. Kornai (1980) The Economics of Shortage, Amsterdam, North-Holland.
37 P. Krugman (1993) ‘Toward a counter–counter revolution in development theory’, Proceedings of the World Bank Annual Conference on Development Economics, World Bank.
38 I. Little (1982) Economic Development, New York, 20th Century Fund.
39 J. Stiglitz (1993) ‘Comment on Krugman’, Proceedings of the World Bank Annual Conference on Development Economics, World Bank.
40 L. Jayawardena (1993) ‘Comment on Krugman’, Proceedings of the World Bank Annual Conference on Development Economics, World Bank.
43 See, for example, Isidro Parra-Pena (1979) ‘Capitalismo periférico y subdesarrollo’, in Comercio Exterior, Mexico City, November, pp. 1233–42. 46 Diana Hunt (1989) Economic Theories of Development – An Analysis of Competing Paradigms, Harvester Wheatsheaf, Hemel Hempstead, UK.
47 A. Hirschmann (1958) The Strategy of Economic Development, Yale.
48 See Michael Hopkins and Rolph Van Der Hoeven (1983) Basic Needs in Development Planning, London, Gower.
51 S. Sweetland (1996) ‘Human Capital Theory – foundations of a field of inquiry’, in Review of Educational Research, 66(3): 341–59.
52 Richard B. Freeman (1993) ‘Labour market institutions and policies: Help or hindrance to Economic Development?’, Proceedings of the 1992 World Bank annual conference on Development Economics, The World Bank, Washington.
57 M. Friedman (1953) Essays in Positive Economics, University of Chicago Press.
59 Ben Fine (1998) Labour Market Theory, Routledge, London.
60 R. Solow (1987) ‘Unemployment: getting the questions right’, in C. Bean et al (eds) The Rise in Unemployment, Oxford, Blackwell.
61 P. Doeringer and M. Piore (1971) Internal Labour Markets and Manpower Analysis, Lexington.
62 L. Squire (1979) ‘Labour force, employment and labour markets in the course of economic development’, World Bank Staff Working paper, No. 336, June.
64 K. Hart (1973) ‘Informal income opportunities and urban employment in Ghana’, in Journal of Modern African Studies, London, II(1), March.
65 ILO (1972) Employment, Incomes and Equality in Kenya, Geneva.
66 J. Harris and M. Todaro (1970) ‘Migration, unemployment and development: a two sector analysis’, in American Economic Review, 60(1) March.
67 R. Hayter and T. Barnes (1992) ‘Labour market segmentation theory. Flexibility and recession – a British Columbia Case Study’, Environment and Planning, 10(3): 333–53.
68 This section draws from both Ben Fine (1998, op. cit.) and Krugman (1993, op. cit.).
69 P. Romer (1986) ‘Increasing returns and long-run growth’, Journal of Political Economy, 94(5): 1002–37; and P. M. Romer (1989) ‘Human capital and growth: theory and evidence’, Journal of Political Economy, No. 98.
70 R. E. Lucas (1988) ‘On the mechanics of economic development’, Journal of Monetary Economics, No. 22: 3–42
71 M. Hopkins (1999) The Planetary Bargain: Corporate Social Responsibility Comes of Age, Macmillan, Basingstoke, UK.
73 D. Sapsford and A. Tzannatos (1993) The Economics of the Labour Market, Macmillan, Basingstoke, p. 408.
74 R. Layard, S. Nickell and R. Jackman (1991) Unemployment: Macroeconomic Performance and the Labour Market, Oxford University Press, Oxford, p. 171.
77 Guy Standing (1999) Global Labour Flexibility: Seeking Distributive Justice, Macmillan, Basingstoke, UK.
78 D. Sapsord and Z. Tzannatos (1993) The Economics of the Labour Market, Macmillan, Basingstoke, UK.
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© 2002 Michael Hopkins
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Hopkins, M. (2002). An Overview of Major Theories of Labour Market Mismatch. In: Labour Market Planning Revisited. Palgrave Macmillan, London. https://doi.org/10.1057/9781403920263_2
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DOI: https://doi.org/10.1057/9781403920263_2
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