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npdtan92 npdtan92
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A week ago
Explain the term "labor hoarding."
Textbook 

Macroeconomics


Edition: 3rd
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billbyebillbye
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Sometimes, a fall in the unemployment rate is delayed by a year or more after the growth rate of real GDP picks up at the end of a recession. This delay occurs for several reasons, but the most important one is labor hoarding. Because recruiting workers and training them is costly, firms may not want to lay off qualified workers during a temporary slowdown. During a recession, some firms will reduce the hours of their workers or even pay those workers to come to jobs at which little gets done, rather than laying the workers off. When the economy recovers and these firms increase production, they will not initially need to hire new workers, because they can start to ramp up production by fully utilizing the workers they hoarded during the contraction.

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npdtan92 Author
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this is exactly what I needed
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Smart ... Thanks!
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This site is awesome
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