Generalization of the scientific approaches to the defining of socio-economic essence and structure of labor market

Abstract

The article is devoted to the generalization of scientific approaches to the defining of socio-economic essence and structure of labor market. It has been revealed that in modern economic science there are three main groups of approaches to the defining of socio-economic essence and structure of labor market that are classical, Keynesian and institutional. According to classical approaches to the defining of socio-economic essence and structure of labor market (J. Clark, F. Hayek, R. Holl, D. Gilder, М. Fedstain, І. Fisher, М. Friedman, A. Marshall, C. Marx, А. Pigu, E. Phelps, А. Smith, D. Ricardo) competition on the labor market excludes emergence of forced unemployment and dynamic of interest rate. Elasticity of the relationship between prices ans wages provide full employment in the economy. According to key statements of Keynesian economic theory (D. Bogynia, Е. Domar, І. Grabynska, J. Hicks, J. Keynes, М. Lihachev, R. Harrod) demand on labor does not form supply on it but, on the contrary, effective aggregate demand increase in aggregate supply, including supply on labor, so reaching of equilibrium on the labor market must be provided by a government. In other words, representatives of Keynesian concept proved idea about need of active government intervention in the economy, including state regulation of labor market, and determined taxes and expenditure as key instruments of fiscal policy to fight unemployment. According to institutional approaches (J. Commons, R. Couz, О. Grishnova, Т. Kyrian, U. Мitchell, S. Panchyshyn, A. Reeves, D. Stuckler, D. Zoidze) dynamic of labor market is determined by development of some industries, activity of trade unions, interaction between different social and professional groups as well as traditions that exist in any region or country. In addition, representatives of Institutionalism put forward an idea about need of state regulation of labor market using mechanism of unemployment insurance, concluding permanent contracts between employers and employees concerning salary, perks, compensation package, social benefits, paid leave and flexible working arrangements. Summing up all viewpoints above, it has been proposed author’s definition of labor market that is regarded a system of economic, political and social relations that characterize level of development and agreement of economic subjects’ needs of buying and selling of labor force.