Person-specific costs of production: hours of work, rates of pay, labour contracts.

This note focuses on some implications of person-specific costs of production, costs of production which arc proportional to the number of persons employed. Costs of providing office space, lockers, written instructions, specialized clothing, and on-the job training are examples of person-specific costs of production, Such costs imply that aggregate production costs are. dependent upon both hours utilized anti on the number of employees. In order to economize on such costs the employer will induce employees, through premium wage rates, salaries, or other contractual arrangements, to work longer hours than they normally would. [ABSTRACT FROM AUTHOR]