ABSTRACT
This chapter investigates the main comparative static theory concerned with the effects of changes in non-wage labour costs and other factor prices on the distribution of workers, hours per worker and the capital stock. It is intended to fulfil two important requirements in the development of the whole text. First, this chapter attempts to underline in a more formal manner why it has been important to distinguish among the various categories of non-wage labour cost in Chapters 2 and 3. Second, it is aimed at providing some useful underpinning of certain theoretical, empirical and policy issues of later chapters.
