In the two-sided search model, the size of the labour force is positively related to
A)the ratio of males to females in the labour force.
B)the population growth rate.
C)the expected payoff to searching for work.
D)the expected cost to searching for work.
E)the benefits of non-participation.

Question

Quizplus · Accepted Answer

In the two-sided search model, the size of the labour force is positively related to the expected payoff to searching for work. This means that as the expected payoff (such as wages or job opportunities) increases, more people will enter the labour force, potentially resulting in a larger overall labour force size. Factors such as the ratio of males to females, population growth rate, expected cost to searching for work, and benefits of non-participation may have some impact on the labour force size, but they are not directly related to it in the same way as expected payoff.

In the Two-Sided Search Model, the Size of the Labour