ABSTRACT
Labour markets provide a special input into production, namely labour power. Labour is therefore an endogenous production factor, quite similar to physical capital, which is also a produced production factor. Internal labour markets are labour markets located within firms. These employers recruit for junior positions, often through traineeships. The logic behind the added worker effect is the desire of households to keep their income level constant, or at least, not to allow a decline. In developed countries, underemployment often refers to seasonal employment and flexible hour contracts where actual hours are less than the worker desires. In Post Keynesian economics, labour supply is seen as endogenous, as it is in social economics. The informal economy consists of many self-employed workers who have long working days but very low productivity due to limited demand for their products and services.
