(Pontificia Universidad Católica del Perú. Departamento de Economía, 1993)
What kind of market is the labour market? Is it a Walrasian one? What is the role of the social backdrop in labour market’s operations? This paper seeks toprovide an analythical answer to these issues. It reviews firstly, theoretical neoclassic, Keysian and classic economics’ responses. Because these theories posit hypotheses in open contradiction with Latin American conditions, they are all modified to propose the corresponding extended models. The resulting models provide more consistent forecasts based on Latin American basic data. The paper then proposes a number of policies to address the “employment issue” and concludes by pointing to the dual nature of the labour market, i.e. social relations expressed through markets and relations within the firm. All theories on the labour market should take account of this peculiar characteristic.
