Question

Labor market development

-Why relative college labor supply and college premium have both increased over the past three decades in developed countries; discuss the impact of automation on the labor market.

-Illustrate the issues that will arise from the aging problem and policies that may ease the problem.

-Illustrate policies that may impede or facilitate rural-urban migration.

Answer 1

1.

With regard to automation, the less-educated have a higher chance of working routine jobs. Routine jobs are more dependant on automation with regard to ones that need a college degree.

With automation, where vehicles can automatically take children to school where parents are not needed or traffic is controlled. This increases productivity, reducing cost, thereby the need to decrease labor supply. The ones most likely to be affected are those without a college degree, as routine jobs can be easily automated while college jobs will take time to be affected.

Automation involves cost of technology relative to human labour, so routine jobs may decrease thereby increasinng college premium, creating inequality. For the current scenario college labour supply may remain constant or increase as currently automation isn't perfect. Technology has to be further cracked, this would take time.

2.

Some of the problems are:

• Increase in health care cost
• Increase in dependency ratio
• Decline in people who can work

Policies that may help:

• Immigration
• Opportunities for elderly to work longer
• Priority to volunteering for elderly care

3.

Policies that may impede or facilitate rural-urban migration are:

• Create more opportunities at rural areas
• Provide basic facilities and improve facilities
• Planned development in urban areas
• Improve law and order

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