Transformations  in
Business & Economics

Labour Market Theories in Contemporary Economics
Waclaw Jarmolowicz, Magdalena Knapinska

ABSTRACT. The subject of this article is a synthetic presentation, analysis and evaluation of contemporary labour market theories, especially based on the achievements of the authors of the neo-classical and Keynesian schools.

First, there is presented the genesis and main concepts of the traditional views and then the newest theories of the main stream of economy referring to the functioning of the labour market in developed countries are presented. Special attention is paid to the issue of work force mobility and flows. The review of chosen contemporary labour market theories has been conducted in three areas. The first one emphasizes mainly the structural and institutional factors as the ones causing unbalance on the labour market, which is exemplified by the segmentation theory.

In the second one it is stressed that unbalance may be caused by interferences in long-term adjustment processes on the labour market, and which is presented in the human capital theory, natural rate of unemployment theory or the job search theory.

The third area of discussion concerns the idea that unbalance on the labour market may result from the inflexibility of wage, which has been assumed in the efficient wage theory and in the insider-outsider theory.

KEYWORDS: labour market, labour market theories, theory of economics.

JEL classification: J40.