The Genealogy of the Labor Hoarding Concept
The Center for the History of Political Economy Working Paper No. 2014-13
55 Pages Posted: 11 Sep 2014
Date Written: April 1, 2014
The modern concept of labor hoarding emerged in early 1960s, and soon became a standard part of mainstream economists’ explanation of the working of labor markets. The concept represents the convergence of three important elements: an empirical finding that labor productivity was procyclical; a framing of this finding as a “puzzle” or anomaly for the basic neoclassical theory of the firm, and a proposed resolution of the puzzle based on optimizing behavior of the firm in the presence of costs of hiring, firing, and training workers. This paper recounts the history of each of these elements, and how they were woven together into the labor hoarding concept. Each history involves people associated with various research traditions and motivated by an array of questions, many of which were unrelated to the questions that the modern labor hoarding concept was ultimately created to address.
Keywords: labor hoarding, productivity, business cycles
JEL Classification: B2
Suggested Citation: Suggested Citation