RURAL DISTRICTS AND THE RATIONED LABOR-MARKET - A THEORETICAL APPROACH

The article outlines a theory of the labour market based on the notion of rationing of job opportunities. The labour market is rationed in the sense that many people want to move into new jobs at prevailing terms of employment but are unable to do so because jobs are in short supply. Parts of the labour market are rationed while other parts are unrationed. Institutional forces block equilibrating mechanisms in the market, and oversupply of labour in certain parts of the labour market remains. Since growth sectors in the economy usually also are rationed in the labour market, this means that economic expansion in these sectors is a smooth process in a labour market perspective: there is a potential for mobility in the unrationed parts of the labour market which is utilized when expansion occurs. "Potential job-changers" and "involuntarily employed people" in unrationed employment find their way to more attractive jobs in the rationed growth sectors. If economic development meets obstacles, problems are thus not to be found in the labour market but rather in the product markets of the economy. When the labour market is conceived as differentiated and rationed, the case for the use of subsidies as part of public economic policies is strengthened. The article ends with the warning that elimination of economic policies favouring rural districts in Norway will reduce employment in the periphery without contributing in any way to growth elsewhere in the economy.