Please use this identifier to cite or link to this item: http://192.168.194.112/handle/1/2447
Title: Structure of labour markets:An inquiry into job search methods, occupational mobility, and duration of search
Authors: Krishna, M.
Keywords: School of Management and Labour Studies
Bino Paul
Occupational mobility
Labour Market
Issue Date: 2013
Publisher: TISS
Abstract: ‘How labour markets operate in an economic system?’ has long been a dominant area of research in economics, and that has received tremendous scholarly attention from diverse fields of social sciences. The functioning of the labour markets, according to conventional wisdom, is primarily confined to the two fundamental axioms of market: demand and supply. From a pragmatic point of view, these two axioms represent two principal agents: workers and firms. More aptly, while the former represents the supply of labour, the latter represents the demand for labour. Put it in a slightly different way, whilst the supply of labour deals with the number of people who participate in the labour markets, the demand for labour represents the firms that decide how many workers to be hired. What is essentially important is that two agents –workers and firms- possess two distinct motives. On the one hand, when the workers tend to maximise their well-being, called utility, firms, on the other hand, attempt to maximise profit. The conflicting interests between the workers’ decision to participate in the labour markets and the firm’s decision to hire workers are determined by wage rates, which are paid for the productive services rendered by workers. Quite clearly, with related to the level of wage earnings, the demand for and the supply of labour move in opposite direction. When the level of wages increases, workers are more likely to supply their productive services, but few firms are willing to hire them, and vice versa. In a competitive or a free market economy, these conflicting interests ultimately attain an equilibrium point, a situation of market in which the demand for and the supply of labour are equal. In fact, this simplistic representation of the operation of the labour markets can also be interpreted from two distinct angles. First, as stated above, the conventional wisdom posits that the agents –firms and workers -possess complete information about the market condition, leading to a smooth interaction in an exchange system. It is assumed that, with the assumption of perfect information, workers are able to maximise their utility by participating in suitable jobs, and firms can employ an efficient workforce in order to achieve its goal, i.e., maximisation of profit. Nonetheless, from a pragmatic point of view, the assumption of perfect information appears to be quixotic. As noted by Stigler (1961, 1962), none of the agents in the labour markets possess perfect information. In the context of imperfect information, on the one hand, workers find difficulty in obtaining better jobs that fit their skills; on the other hand, firms may not find better workforce. Therefore, information regarding labour market plays a critical role in workers’ and firms’ decision-making process. In essence, from a worker’s point of view, the availability of information not only influences the workers’ choice to participate in the labour market, but also paves the way for occupational mobility -be it intrafirm or inter-firm -new job opportunities, and investment of different forms of skills. Put it in a nutshell, the investment in possessing information on available job opportunities, employment related aspects, work place environment, tenure of work, and the behaviour of employers, plays a pivotal role in the labour market outcomes. That is why, information, like any other factors of production such as land, labour, and capital, is conceived as a valuable economic factor. Second, by way of assuming perfect information, the conventional economic theory rules out the possibility of being influenced by social factors, broadly termed as social structure. Put in a slightly different way, social structure, which results from investment in social capital, has nothing to do with the labour market outcomes. Viewing labour market as an economic phenomenon, rather than a structure enmeshed in various socio-economic elements, provides a partial explanation to the interaction between firms and workers. More aptly, the complex realities emanating from the interaction between firms and workers are paid little attention in the conventional wisdom. What is essentially important is that since information is imperfect, people look for jobs and better employment prospects through developing a patterned relationship with several other agents, quite reflected in the literature of social network analysis. Equally important is that the assumption of perfect information discards the chances of being unemployed, a situation in which people are ready to work, but not able to find seasonable jobs. If a job seeker is assumed to have perfect information about the labour market condition, then there is no need to look for jobs. A fundamental characteristic of the labour market, irrespective of developed or developing countries, is that workers often tend to cast about for better jobs. Against this backdrop, the main purpose of the present study is to examine how social structure influences the workers’ labour market outcomes. Although the role of information in labour markets has received tremendous scholarly attention in developed countries, there is a dearth of empirical attempts in developing countries such as India to understand the functioning of the labour markets. Nor are there much empirical attempts at both the micro and macro levels to underpin the socio-economic characteristics and its impact on the labour market outcomes. In the present study, we attempt to draw a detailed description of the mechanism through which people find jobs, major determinants of labour mobility, particularly intra-firm occupational mobility, and factors that influence the duration of search. An interesting offshoot of the present study is that the analysis of job search methods, determination of wages, and its structural properties are explained in a dynamic framework. To provide empirical support, a field survey has been carried out at Peenya Industrial area, the largest industrial area in South Asia, in Bangalore, Karnataka. A sample of 367 workers is randomly selected for the present study.
URI: http://192.168.194.112/handle/1/2447
Appears in Collections:Ph.D.

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01_Title.pdf208.38 kBAdobe PDFView/Open
02_Declaration.pdf90.63 kBAdobe PDFView/Open
03_Certificate.pdf90.6 kBAdobe PDFView/Open
04_Contents.pdf226.08 kBAdobe PDFView/Open
05_List of Tables.pdf163.62 kBAdobe PDFView/Open
06_List of Figures.pdf81.77 kBAdobe PDFView/Open
07_Acknowledgement.pdf83.44 kBAdobe PDFView/Open
08_Abstract.pdf89.76 kBAdobe PDFView/Open
09_Chapter 1.pdf283.39 kBAdobe PDFView/Open
10_Chapter 2.pdf226.77 kBAdobe PDFView/Open
11_Chapter 3.pdf272.74 kBAdobe PDFView/Open
12_Chapter 4.pdf476.65 kBAdobe PDFView/Open
13_Chapter 5.pdf315.04 kBAdobe PDFView/Open
14_Chapter 6.pdf277.86 kBAdobe PDFView/Open
15_Chapter 7.pdf112.72 kBAdobe PDFView/Open
16_Chapter 8.pdf109.95 kBAdobe PDFView/Open
17_Appendices.pdf331.74 kBAdobe PDFView/Open
18_References.pdf163.28 kBAdobe PDFView/Open


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