This innovative text grounds the economic analysis of labor markets and employment relationships in a unified theoretical treatment of labor exchange conditions. In addition to providing thorough coverage of standard topics including labor supply and demand, human capital theory, and compensating wage differentials, the text draws on game theory and the economics of information to study the implications of key departures from perfectly competitive labor market conditions. Analytical results are consistently applied to contemporary policy issues and empirical debates.

• Provides a coherent theoretical framework for the analysis of labor market phenomena
• Features graphical in-chapter analysis supplemented by technical material in appendices
• Incorporates numerous end-of-chapter questions that engage the analysis and anticipate subsequent results
• Includes innovative chapters on employee compensation methods, market segmentation, income inequality and labor market dynamics
• Balances theoretical, empirical and policy analysis

Joyce P. Jacobsen is Professor of Economics at Wesleyan University. She is the author of The Economics of Gender, Second Edition (Blackwell) as well as numerous research articles. She has also taught at Rhodes College, Harvard University and Northwestern University.

Gilbert L. Skillman is Associate Professor of Economics. He has also taught at Brown University and spent a term as Research Associate at the Swedish Collegium for Advanced Study in the Social Sciences in Uppsala. He has published a number of articles on the economics of employment and organization.