Alternative Approaches to the Labor Market: A Theoretical Evaluation

Abstract

Alternative theories of the labor market: Neoclassical, Keynesian, Neo-Marxian and segmentationist approaches are examined in this paper mainly from a theoretical perspective.

Basic differences and open questions to each approach are studied. These concern to issues like efficiency of market result, nature of unemployment, unit of analysis (individuals vs. classes), time framework (short-run cycles vs. steady-states), market structure (segmentation vs. homogeneity), disequilibrium dynamics, aggregation, partial vs. general equilibrium and others.

The paper is closed with a section which summarizes previous discussion and also highlights unresolved conceptual problems to each approach.