Why can't the unemployment problem be solved? As a researcher, should we change our thinking and adjust our perspective? For example, most Chinese and foreign works on unemployment are analyzed at the macro level, and simple macro analysis and the policies formulated from it cannot effectively solve the unemployment problem. Then, is it also a valuable path to examine unemployment from a micro perspective? Dr. Ning Guangjie's book Unemployment Research-A Micro-analysis Framework is a positive attempt in this regard.
From the perspective of theoretical development, since the 1960s, more and more economists have realized that macroeconomics needs a micro-foundation, among which the most representative school is the Neo-Keynesian School. Inspired by this, the author believes that unemployment, as a major macroeconomic problem, should also have a micro-foundation. Micro-analysis can enrich and develop the existing unemployment theory. In the process of collecting and sorting out information, the author found that although the micro-analysis of unemployment in western academic circles has begun, it is far from complete. The author hopes to comb and supplement the existing micro-analysis theory of unemployment, and strive to make it more complete. More importantly, the author hopes to find some general rules and extract some things that can be used for reference to solve the unemployment problem in China.
So, what does the micro-analysis of unemployment specifically include? This book emphasizes that micro-analysis can find the micro-reasons of unemployment, such as the influence of trade union organizations and insiders on wages, which will affect the unemployment situation of the whole society. It can also be the micro-foundation of macro-reasons. For example, the micro-foundation of insufficient total demand is the investment demand of micro-enterprises and the consumption behavior of individual workers. It can also be the reaction of micro-subjects to macro-variables, such as how enterprises adjust prices and wages according to expectations when implementing monetary expansion policies.
Therefore, the significance of this book is to provide a micro-analysis framework for the study of unemployment, which I believe will make the explanation of unemployment richer, clearer and more accurate. However, the analysis and viewpoints in this book are not completely conclusive, but provide a train of thought and framework for the micro-analysis of unemployment. Emphasizing the significance of micro-analysis does not mean that micro-analysis can explain the whole unemployment problem. We still can't ignore the macro reasons for unemployment. Micro-analysis must be combined with macro-analysis to form a complete unemployment theory.
The core of unemployment research is to explore the causes of unemployment. The micro-analysis of this book is based on the unemployment theory formed by predecessors, which has developed and broken through. Under the assumption of imperfect market and insufficient information, the author analyzes the behaviors of manufacturers and workers in enterprises and markets, including how wage decisions and changes form wage stickiness, why the investment demand of enterprises is insufficient, the technological choice of enterprises and the responses of stakeholders to technological changes, and the search behavior of both enterprises and workers. On this basis, the author explains the traditional classical unemployment, Keynesian unemployment with insufficient effective demand, structural unemployment and friction unemployment. But it is not limited to this. This book's analysis of the causes of unemployment and the corresponding types of unemployment are different from traditional theories. For example, classical unemployment thinks that the reason for unemployment is excessive wages, while the author thinks that it is wage stickiness. Keynes's unemployment theory only emphasizes the insufficient investment demand of enterprises, and the author's analysis also includes consumer demand and monopoly of manufacturers. The fourth chapter analyzes the structural causes of unemployment, including the adjustment of industrial structure, the mismatch of workers' skills and the dual structure labor market brought about by technological progress. Traditional friction unemployment does not deeply analyze the root of search cost. The author believes that the search cost not only comes from insufficient information, but also comes from institutional obstacles.
Based on the traditional types of unemployment, this book analyzes the internal wage decision, investment demand, structural reasons and labor market friction from the perspective of labor supply and demand, all of which are centered around wages. This paper analyzes how the wage level conflicts with the profit maximization of business owners under uncertain conditions, how it is related to the capital accumulation, investment demand and technology selection of enterprises, how it affects consumer demand, how it promotes the flow of workers between different industries and enterprises, and finally affects unemployment. To reflect the two important reasons of unemployment emphasized in this book: insufficient information and institutional obstacles.
Due to insufficient information and conflicts of interests among all parties in the enterprise, wages can not correctly reflect the relationship between supply and demand of labor, and enterprises can only resort to the adjustment of the quantity of labor, thus bringing about changes in unemployment. The ownership structure and market structure of enterprises will affect wage decision-making, investment demand, technological change and structural problems of unemployment. Whether the information in the labor market is sufficient and whether there are institutional obstacles determines the number of frictional unemployment. At the same time, there will be coordination failure in product market and labor market, that is, transaction cost will make individual rational behavior bring external diseconomy to the whole society.
The information problems here include uncertainty about future expectations, insufficient information, imperfect information, asymmetric information and so on. The system here is a very broad concept, including not only the basic social system, such as Marx's saying that the bourgeoisie occupies the means of production and employs laborers for production, but also some non-basic systems, such as the unemployment insurance system. There is an institutional relationship between the two opposing classes, and there is also an institutional relationship between the bourgeoisie and the proletariat (the former is the monopoly of manufacturers and the latter is the relationship between people inside and outside the enterprise). Of these two reasons, the influence of the system is more fundamental and important. As micro-analysis goes deep into enterprises, we can see more thoroughly that the basic institutional relations (labor relations and income distribution) have played an important role in the emergence of unemployment.
This is the innovative significance of this book in theoretical exploration. This theoretical analysis is based on a profound understanding of reality and is of guiding significance to the governance of unemployment in the real economy.
The author pays special attention to the significance of micro-analysis of unemployment in solving the current unemployment problem in China. Therefore, in the second to sixth chapters, after theoretical analysis and empirical research in western countries, there is a special part to analyze the unemployment problem in China, and it is done at the micro level. The current unemployment problem in China is closely related to the behavior of micro-subjects, such as the inflexible wages of state-owned enterprises, the blindness of investment demand of state-owned enterprises, the dislocation of enterprise technology selection and factor prices, and the friction between enterprise employment system and laid-off workers' search. In other words, the long-term unemployment problem cannot be solved simply because of the poor macroeconomic situation or the reorganization of state-owned enterprises. In recent years, the coexistence of high economic growth rate and high unemployment rate has become a difficult problem that puzzles many people, including some scholars. Is this related to micro-behavior? If we coordinate and guide the employment behavior of enterprises and the behavior of workers, employment will be smoother and the unemployment rate will be effectively reduced.
In the last chapter, the author comprehensively expounds the policy implications of micro-analysis of unemployment and its reference significance to China. The governance of unemployment is a comprehensive project, and his suggestions are more microscopic, such as guiding enterprises to choose technology, strengthening workers' skills training, creating a good financing environment for enterprises, fostering small and medium-sized enterprises, and improving the functions of market intermediaries. Macro-fiscal and monetary policies are also very important, but we must obtain the cooperation of micro-subjects. These views are of reference value. Considering the factors of state-owned enterprise reform, failure to solve the property right problem will lead to micro-investment mistakes, unreasonable industrial structure, rigid employment system and inefficient labor market. Promoting enterprise reform and establishing a modern enterprise system is also a process of shaping micro-subjects.
In a word, this book has made great efforts in exploring the micro-analysis of unemployment, and has achieved gratifying research results both in theory and in countermeasures. In addition, in terms of research methods, the author also pays attention to empirical tests, such as quantitative analysis of the post-war unemployment rate in the United States.
This book studies the basic unemployment theory, makes an empirical analysis with the dynamic changes of unemployment in major developed countries, and is also closely related to the current unemployment situation in China. Therefore, the book has both theoretical connotation and close to the real economy; We should not only grasp the context of unemployment in western market economy countries, but also pay attention to the solution of unemployment in China. This is an enduring economic monograph and a valuable policy reference book.