The modern concept of labor hoarding emerged in early 1960s, and soon became a standard part of mainstream economists’ explanation of the working of labor markets. The concept represents the convergence of three important elements: an empirical finding that labor productivity was procyclical; a framing of this finding as a “puzzle” or anomaly for the basic neoclassical theory of the firm, and a proposed resolution of the puzzle based on optimizing behavior of the firm in the presence of costs of hiring, firing, and training workers. This paper recounts the history of each of these elements, and how they were woven together into the labor hoarding concept. Each history involves people associated with various research traditions and motivated by an array of questions, many of which were unrelated to the questions that the modern labor hoarding concept was ultimately created to address.
The catalyst for this paper was a conversation with Dan Hamermesh, who also provided insightful comments on an earlier draft. I would also like to acknowledge useful comments from Roger Backhouse and participants in Duke University’s HOPE workshop.
Biddle, J.E. (2015), "The Genealogy of the Labor Hoarding Concept", A Research Annual (Research in the History of Economic Thought and Methodology, Vol. 33), Emerald Group Publishing Limited, pp. 125-161. https://doi.org/10.1108/S0743-415420150000033013Download as .RIS
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