Exploring the Employment Gap & MRP: Suggesting Reasons & Solutions

[Air]

I've come across a question which talks about the employment gap and asks me to suggest reasons on how it would occur.

I thought better qualification could improve skills. I got this correct but I have to expand. Can someone explain how I can talk about MRP?

Thanks in advance.

 

[marcus]

I've come across a question which talks about the employment gap and asks me to suggest reasons on how it would occur.

I thought better qualification could improve skills. I got this correct but I have to expand. Can someone explain how I can talk about MRP?

Thanks in advance.

Is this a homework question, or exam? You might try up in the "homework help" subforum.

What you mean by MRP is, I assume MARGINAL RETURN ON PRODUCT
http://answers.google.com/answers/threadview?id=338504
and there is this "MRP = W" equation which says that in a competitive market the firm will keep on hiring more workers as long as the marginal return it gets from the extra output is less than the cost of hiring extra workers. Or something like that.

It sounds like a homework help question. Why would unemployment exist in a a perfect rational competitive market? Is that the question? Does "employment gap" mean unemployment?
It could be that if their marginal productivity is low enough that firms don't want to pay what they think is a decent wage! Then they find something else to do. Like gardening at home, or fishing, or staying at their relatives.

To cure that, you need to retrain the workers so their productivity is higher, so the MRP goes up and wages go up and people are drawn into the labor market etc etc. All in this idealized perfect rational economy.

Or you have to improve the machines at the firm, so that workers productivity is higher. So then the firm can hire more because the MRP is higher and they can pay higher W.

I'm not an econ expert. I'm just trying to help. I think they are better at it in that other subforum.

 

[Architeuthis Dux]

I am always interested in exploring and understanding complex issues such as the employment gap. This gap refers to the difference between the number of available jobs and the number of individuals seeking employment. It is a major concern in many countries and can have significant impacts on the economy and society.

There are several reasons why the employment gap may occur. One possible reason is the mismatch between the skills and qualifications of job seekers and the requirements of available jobs. This is where MRP, or Marginal Revenue Product, comes into play. MRP is a measure of the additional revenue that a company can generate by hiring an additional worker. It takes into account the productivity and efficiency of an employee and is used by companies to determine the value of a worker.

In the context of the employment gap, MRP can help explain why some individuals may struggle to find employment despite having higher qualifications. This could be due to a lack of demand for their particular skills or a surplus of workers with similar qualifications. On the other hand, individuals with in-demand skills and high MRP may have more job opportunities and higher salaries.

To expand on the relationship between MRP and the employment gap, we can also consider the role of education and training. While having higher qualifications can certainly improve one's skills, it is important to also consider the quality and relevance of education and training programs. If these programs are not aligned with the needs of the job market, it can lead to a mismatch between the skills of job seekers and the requirements of available jobs, contributing to the employment gap.

To address the employment gap, it is crucial to focus on bridging this mismatch and ensuring that individuals are equipped with the skills and qualifications that are in demand in the job market. This could involve providing more targeted and relevant education and training programs, as well as promoting the development of new industries and job opportunities. Employers can also play a role by investing in their workers and providing opportunities for upskilling and reskilling.

In conclusion, understanding the concept of MRP can help shed light on the reasons behind the employment gap. By addressing the mismatch between skills and job requirements and promoting the development of in-demand skills, we can work towards closing this gap and creating a more balanced and prosperous job market.