Explanation Generally, both the quits and layoffs are frequently observed in the labor markets. This is mainly because of the difference between the worker’s skill and the different working condition offered by the firms. The workers and firms both can increase their productive capacity, when perfect job matches take place. If employees and firms knew exactly which match had the highest value, the workers would look for the best companies, and companies would look for the best workers. However, in reality in the initial stage, both firms and the workers are ill-informed about the match’s true value...

Explain how do quits and layoffs help to improve the labor market efficiency .

LABOR ECONOMICS

8th Edition

ISBN: 9781260004724

Author: BORJAS

Publisher: RENT MCG

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Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

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Explain how do quits and layoffs help to improve the labor market efficiency.

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