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Labor Markets and Income

14

FIGURE 14.1 What determines incomes? In the U.S., income is primarily based on one's value to an employer,

which depends in part on education. (Credit: modification of work by AFL-CIO America's Unions/Flickr Creative

Commons and COD Newsroom/Flickr Creative Commons)

CHAPTER OBJECTIVES

In this chapter, you will learn about:

• The theory of labor markets

• How wages are determined in an imperfectly competitive labor market

• How unions affect wages and employment

• How labor market outcomes are determined under Bilateral Monopoly

• Theories of Employment Discrimination, and

• How Immigration affects labor market outcomes

Introduction to Labor Markets and Income

BRING IT HOME

The Increasing Value of a College Degree
Working your way through college used to be fairly common in the United States. According to a 2015 study by the
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