Labour markets Marginal product of labour The increase in a firm’s revenue created by hiring an additional labourer. Declines with more labour. Firms hire as long as wage < marginal product. Education Is education just a signalling tool or does education provide real benefits? Earnings are co-related with having a college degree, even liberal arts degree. Not finishing a college does not add to future earnings, even if a person leaves college in the last year. This is the basic premise of s...