The cost of shifting workers from declining sectors of the economy to growing sectors is known as:
A) irreversible employment.
B) a labor adjustment cost.
C) labor bunching.
D) intertemporal substitution.

Question

Quizplus · Accepted Answer

The cost of shifting workers from declining sectors of the economy to growing sectors is known as labor adjustment cost. This reflects the costs involved in retraining and relocating workers, as well as the loss of productivity that occurs during the transition. Option A is incorrect as irreversible employment is not a term commonly used in labor economics. Option C, labor bunching, refers to the phenomenon of many workers all seeking employment at the same time, which can lead to higher wages in certain industries. Option D, intertemporal substitution, refers to the idea that workers may choose to work more or less at different points in time depending on relative wages and other factors.

The Cost of Shifting Workers from Declining Sectors of the Economy