Labour hoarding occurs
A)when firms keep good workers so other firms can't hire them.
B)when the unemployment rate exceeds the natural rate of unemployment.
C)when involuntary unemployment exceeds voluntary unemployment.
D)when,because of hiring and firing costs,firms retain workers in a recession that they would otherwise lay off.

Question

Quizplus · Accepted Answer

Labour hoarding occurs when firms retain their workers in a recession, even though the workers may not be fully utilized, because of the costs associated with hiring and firing workers. This results in a situation where workers may not be laid off even though productivity levels may be low. This can cause inefficiencies in the labor market and result in higher unemployment rates.

Labour Hoarding Occurs