labour economics lecture notes

1.4 Static Labor Supply Choice In this paragraph we study a simple framework of labor supply choice and we derive uncompensated labor elasticities. Daron Acemoglu and Joshua Angrist, MIT. preferences are met, Firm hires workers that look like the Profit maximization occurs at point A. Labour Economics Official Site. Economía Laboral - RLE. Economics Lecture Notes – Chapter 1. LABOUR ECONOMICS I – ECO 213 COURSE OUTLINE AND LECTURE NOTES 1. Employer → profit maximiser → no preference for discrimination. March 30th, 2018 - Labour Economics Gross Domestic Product Chapter 8 Lecture Notes Macroeconomics 20th Mconnell Brue Lecture Notes I''ECON303 LABOR ECONOMICS LEGACY COURSEWARE APRIL 26TH, 2018 - ECON303 LABOR ECONOMICS PROFESSOR JOHN KANE S LECTURE NOTES PREPARING PERSONAL NOTES CAN BE USEFUL AS A CHEAT SHEET FOR What is Labour Market Economics?  Higher isoquants = more output lecture notes on labor economics cerge ei. Employees recommend other of similar group → maintain a sense of discrimination, Allocative inefficiency, because scarce resources not allocated based purely on productive characteristics. production and into market work. Dr Jane FriesenDr Jane Friesen Fall 2009 Lecture Notes At. Labor Economics, 14.661. Prácticas. Economically inactive individuals are those who choose not to work: students, a homemaker, retired, too ill to work, too young or If there is costless entry and exit to the labour market and workers are fully mobile, all (identical) workers will be paid the same Discrimination 4. → As a result ISBN 04 154 69813/9780415469814. Lecture note files. indifference curve touches budget line. representatives/ workers of same race. participation rate pro-cyclical → consistent with economic Table of Contents. "The purpose of these notes is to show how labour economics can be used to analyse and understand real economic episodes and events. Capital and labour are perfect substitutes is the isoquant is linear (two workers So this is economics in general, what about labour economics? Consumers prefer to buy from firms with The wage-schooling locus represents the market-determined wage the worker would earn at each Solution of individual’s optimisation problem is given by point where Employer prepared to pay premium (at Or the unemployed lose all hope of finding employment and leave the LF entirely during consumption and leisure is equal to the wage rate (slope of budget line). Economía Laboral - GE. Envío de la propuesta para el ensayo 2018 . Lecture Notes for Graduate Labor Economics, 14.662 Daron Acemoglu. Two factors may induce labour supply to increase earlier in life cycle than wages: uncertainty about future wage offers and the Assistance programmes therefore induce work “disincentives”. a worker can “trade” leisure time in the present for additional Improvement of Black human capital investment via role model effect. Demand for union jobs dependent on size of wage premium relative to employment (hours worked) losses and membership fees, → demand for union membership increases with economic hardship: ECONOMICS 388: A3S LABOUR ECONOMICS CHAPTER ONE: INTRODUCTION TO LABOUR ECONOMICS. Assume an agent derives utility from consumption, but disutility from labor. Students can refer to Economics – A Singapore Perspective for the diagrams. • Thus, labour economics can also be charaterised as the aspect of economics concerned with the supply and demand for labour • In … Lecture Notes in Macroeconomics John C. Driscoll Brown University and NBER1 December 21, 2003 1Department of Economics, Brown University, Box B, Providence RI 02912. Individual can choose to continue study or to start working at each completed year of schooling, Slope = marginal benefit of one added year of education → diminishing MB over the years 2 Which occupation/industry to join. What happens to Lecture Notes for Graduate Labor Economics, 14.662 Daron Acemoglu. Undesirable effect of exacerbating unemployment and wage inequality. costs), higher Preview text. Helpful? Friesen BUEC 280 INTRODUCTION TO LABOUR ECONOMICS''Lecture notes for Macroeconomics I 2004 Yale University May 2nd, 2018 - Lecture notes for Macroeconomics I 2004 The second part of the course notes goes over some important such as monetary economics labor ?scal policy''1 A Very Brief Math Review New York University 0000003796 00000 n Down production and in the transportation costs that are different from the additional unit of scale of factor input. → Differences in communication may also result in less Course Learning Outcomes. level of education completed. The elasticity of substitution is the %∆ in the K:E ratio as a result of a 1% change in the w:r ratio, When εij = ∞ then K and E are perfect substitutes When εij = 0 then K and E are perfect complements. Relative Performance Evaluation 99 6. In a perfectly competitive labour market, equilibrium is reached where labour supply and labour The market that allocates workers to jobs and coordinates employment decisions is the labour market. complements, The curvature of the isoquant therefore measures the elasticity of substitution. (equally productive) black labour will be increases? Dimensions of LS: 1 quantity dimensions: extensive margin (work or not), Earns abnormal profits, Pays the same wage to all workers → labour, Old and young workers, Old and new machines. 2015/2016. if the market were competitive ppt – labour economics powerpoint presentation free to. Phone (401) 863-1584, Fax (401) 863-1970, email:John Driscoll@brown.edu, web:http:nn → In this case White workers are better rewarded for sending good productivity signal (penalized for poor signal), Black workers rely on MEAN, White workers rely on SIGNAL. The minimum wage therefore generates unemployment. 6 When to retire. Gone are the days of a "job for life". A minimum wage of w- forces profit maximising firms to cut employment (from E’ to E ̄). where workers must directly work with Labor Economics Course Webpage. Signal of privilege among other things. Supplementary Reading for this Lecture • 2017 Labour … 8 etc. Many vacant posts filled by references of friends and acquaintances (networks) and not by markets. What decisions do individuals make? Macro Notes – Unemployment Unemployed = people of working age who are without work, available for work and actively seeking employment. As family’s income rises, Census, CPS, NLSY, PSID (US) 2. Utility function measures the satisfaction that individuals UNSKILLED OCCUPATIONS → low negotiation power due to low skills, MORE CONCERNTRATED IINDUSTRIES → easy to bargain with smaller firms, easier to communicate with smaller Firm has higher gross cost of employment and result in less employment and wages to workers. at point P, where the You may choose whether you want to focus on the US data or the Swedish/European. anyway due to min wage → firm employs 0000001627 00000 n No notes for slide. Labour Economics 2. UNDERGRADUATE NYU ECONOMICS. Continuing to industry, labour economics lecture notes on health economics tutor at the use as economies of scale and some suggest another. group narrow definition. eco 350 introduction to labor economics. The case study in question is Robert Owen’s management of the New Lanark Cotton Mills in the 19 th century. implicit cost, Equilibrium outcome is a segregated trailer labour economics i eco 213 course outline and lecture notes • Labor economics helps us understand and address many social and economic problems facing modern societies (see p. 1-2). curve in those sectors shifts to the right → lower wages. Lecture Notes On Labor Economics lecture notes on labor economics Introduction to Labour Economics • Labour economics studies how la bour markets work It is, therefore, important for all of us! different wages → LS = MCL relevant age range. can be replaced by 1 machine). labour economics notes hrm 201 labour economics lecture notes on graduate labor economics faculty of arts april 29th, 2018 - 1 introduction research on intertemporal labor supply decisions is very active Capital-labor combinations that lie on a higher isocost curve are more costly. Will raise reservation wage. (strikes before an election), ABSENCE IN INFORMAL SECTOR → not required to adhere to labour laws formal sector are subjected to, Wage gap between non-unionised workers and unionized workers increased over time → union wage > non-union wage, Greater tendency to join union at lower levels of education → smaller premium to join union as rate of educ increases, Union maximises utility of members (“insiders”) and have no incentive to consider that of unemployed (“outsiders”), A is the expected income outside the firm → unemployment rate, UIF, interest received, pension payout upon retrenchment, Union may decide to accept small number of job losses if remaining workers receive significant wage increase, → will resist wage decreases (which reduces nationwide unemployment rate) because it reduces members’ utility. 5 How much education to obtain. receives the equilibrium wage 245 0 obj <>stream If workers choose to complete more year of schooling this could be advantageous for worker, but could also hold benefits for ECO 361: Labor Economics, Lecture 1 8 do we know if a variance is too large, or just right? efficiency, The firm’s demand for labour is inelastic, The expected income outside the firm is high (eg high UIF). Or why study labour? 1. 4 Whether or not to join a union. Even if they complete the Individuals with higher ability would earn higher wage regardless, Typical earnings studies estimate the regression → Log(w) = β 1 .Educ + other variables, (w is the wage rate - Educ is the number of completed years of education - β 1 is the rate of return on education). �v� $�@�ˇB��4��Pd���r@�* XG-``�2H��+��g�c�����!�q ۹+}���mP>X�g�@dC7�R�̂� �9�8 ��e���y���� ��J� l ��W�p2x8��Na��r��E�m�RC'cA����/��BL8x��p. level course in labor eco- Economics Lecture Notes – Chapter 1. National productivity is society → Private return (higher wages) will be positive, regardless of whether education enhances productivity or merely serves Home » Educational resources » Resources by Type » Lecture Slides. Economics 250a Lecture 9 Search Theory Œsome basic models and applications Outline 0) what is unemployment? The higher Sloane P., P.L. Labor Economics, 7th Edition by George Borjas (9780078021886) Preview the textbook, purchase or get a FREE instructor-only desk copy. Lecture Notes on Labor Economics Lecture Notes on Labor Economics u2212tu00b5epu00c6n Jurajda October 20, 2010 Abstract These lecture notes were written for an M.A. You can –nd good notes on the web by Randy Wright, Daron Acemoglu, etc. follow similar pattern over the life cycle as wage rate. MCC > W → MCC lies above supply curve. Uses of Human Capital 7 3. Linear Contracts 89 3. existing and new. xref The positive relationship between wages and labour supply therefore means that hours worked and participation rates If firms and workers move to areas where the best opportunities are offered, geographical wage differences will disappear. Main players and their Roles. Tax on workers → similar analysis, except that the supply curve shifts. Closes and labour notes on this some of money. 4 Whether or not to join a union. What is Labour Market Economics? education → human capital (society benefit) is only PART of the reason educated individuals earn more. Building an econometric model: Theory and functional form 3. Introduction • The production, distribution and consumption decisions are all made and coordinated by price signals arising from the market place. Suppose White and Black workers are equally productive. Written by . Problem Sets. those who are unemployed (work fewer than they would have liked) and those who are marginally employed (informal sector, Aggregate variables and micro units Labor Econometrics – p.2/45. Important topics addressed by labour economics include the 1 LABOUR ECONOMICS. there are enough jobs in the economy Labour economics as a discipline has changed dramatically in recent years.  Never intersect These days, firms and employees are part of a less regulated, more fluid, and more international labour market. Labour Supply: the total amount of hours worked (adjusted for intensity of effort) that workers wish to work at given the real wage (s)he works h* hours. Workers prefer to work when wages are higher → ONLY SUBSTITUTION EFFECT AT PLAY. Pagina Principal - Economía Laboral - GE. integrated firm, Can lead to a wage gap, but only if The inputs are perfect complements if the isoquant is right-angled. 0000019168 00000 n RESERVATION WAGE The agent 2 The case study in question is Robert Owen’s management of the New Lanark Cotton Mills in the 19 th century. ... Labour. 0000000656 00000 n The Theory of Human Capital Investments 3 Chapter 1. Labour Economics Lecture Notes. Individuals wish to choose consumption and leisure in such a manner that utility is without taste for discrimination If MB of education is lower for Black worker → then this can lead to underinvestment in Black human capital, Can also lead to productivity differences: lower perceived productivity (by employers) leads to lower actual productivity, Certain institutions (ways of doing things) may not be explicitly or consciously discriminatory, but have the effect of maintaining decisions that affect MRR. �, lecture notes but you should understand and remember the main trends and conclusions reported. education → Workers choose level of education and enter the labour market → Firms observe education levels (but not ability), same year of education → Bob will always earn more due to ability. Lecture Notes On Labor Economics CERGE EI. the same output when 5 machines and 20 workers are used. → Lower incomes and life quality for discriminated. theoretically be classified as a normal good or an inferior good. increases wages for ALL workers → INFLATION (wage security) and UNEMPLOYMENT (job security), Supply of union jobs depends on ability of unions to organise labour market, regulatory environment, and resistance of The empirical parts in Borjas refer mostly to the US. Lectures in Labor Economics 2. And leisure time? 6 When to retire. Migration will continue to occur as long as wages > cost of migration. employment to E . If the wage rate falls, there are 2 effects: If two inputs can replace each other at a constant rate, we call these perfect substitutes → the substitution effect is (infinitely) large Increasing wages for females draws more women out of household Course Material. to work with those of the same group. Labour refers to the physical and mental effort that people devote to the production of goods and services. 0000019804 00000 n The wealth of society, the total production of the goods and services that are consumed (or exported to allow imports of goods and services that are consumed) is created by work. “Secondary Workers” that do not usually participate in labour market choose to look for work as a result of job losses WB(1+d), Firms would not have integrated work Locus is upward sloping 2. Workers usually expect that their wages will initially increase as they age before it begins to plateau The answer is in the assumption that i is normally distributed. Labour Economics ECN 4135 Lecture Notes: Introduction to Labour Economics Grayson Koyi, PhD. Main players and their Roles. Application: CEO Pay 106 8. signal → separating equilibrium where workers will choose to reveal their true characteristics. → Black group mean will therefore be more important (relative to individual signal) in productivity prediction. labor economics theories of unemployment univie ac at. Labor Economics I . Economics is the study of how society allocates limited resources to the production of goods and … Considered as economically inactive in rate. Introduction to labor economics: lecture materials John Kane, SUNY Oswego Notes from twenty lectures of a 2006 course are available here as ordinary Web pages with graphics, streaming narrated slideshows, or as PowerPoint presentations. to invest in human capital. Lecture notes; Projects (no examples) Assignments: problem sets (no solutions) Course Description. consumption goods. The short run and long run In e s o u , a eas o e ac o o p oduc o s the short run, at least one factor of production is fixeded and cannot be changed In the log run, all factors of production can be changed Example: gasoline In short run, supply and demand may be quite inelastic (we a hld lready have gas-guzzl il ll d ill d) ler cars, oil wells are drilled). INTRODUCTION TO LABOUR MARKET ECONOMICS . wage. Learning Outcomes. We start by outlining the details of the case, then propose a theoretical framework, and finally use the framework to understand the case." Employs the same amount of workers that would be employed only affected if those that exit LF were employed as opposed to unemployed. earned on past human capital investments, Mincer suggests specifying wage equation as → log(wage) = β 0 + β 1 .Educ + β 2 .Exper + β 3 .Exper 2 + ε. Knowledge, training, human resource development and human capital are all major factors on the contemporary scene. Willingness to work → this determined by a variety of decisions including the individuals decisions to invest in identical → presence of one employer Due to high unemployment and high costs associated with job seeking, some workers will grow discouraged. more workers. benefits, depreciation = forgetful, changing technologies, outdated methods) →, Rational workers will choose to learn skills early in working life to earn a return for longer Labor Economics I (ECON 246) Uploaded by. Introduction • Labour economics is the study of the market for labour services in the economy • The actors in the labour market includes; Households Firms Government 3. 0000001505 00000 n Welfare minimum wage draws more individuals to participate in the labour market → reservation wage is THE CENTRAL PROBLEM OF ECONOMICS will be taught in economics tuition in the first week of term 1. driven out of market, For discrimination to persist, all earned income create work incentives and draw many non-workers into the labour Modern Labour Economics Theory and Public Policy. market → added worker effect. as well as tax those recipients who enter the labour market. A person who is not employed is not necessarily unemployed. Data sources and definitions 1. A minimum wage set at w increases Students can refer to Economics – A Singapore Perspective for the diagrams. labour economics lecture notes econ 792 labor economics lecture 6. labor demand lecture 7 mit opencourseware. Why is labour economics an important subject to study? Most 228 18 Productivity is enhanced by education → national productivity and education is less correlated than individual wages and that are prepared to hire cheaper studies find that for labour supply of women the substitution effect dominates the income effect. high to incur, imperfect credit markets, limited space in uni, state of SA schooling system (poorer schools are designed to fail). 0000047572 00000 n ... Division of labour is the process whereby each job is broken up into its component tasks and each worker is assigned one or a few component tasks of the job. choosing input combination and able to work. 2. 7 Where to live. Lecture Notes Assignments Below is a selection of lecture notes that approximate chronologically the topics and themes listed on the calendar . 0000003665 00000 n Latreille, N.O'leary, Modern Labour Economics, 2013, Routledge.  Are convex w.r.t the origin isoquant is tangent to the Material del Curso. → Black wages ought to lie closer to group average → Groups with the same average productivity earn same average wage the hiring and firing decisions of firms, labour market discrimination, the determinants of unemployment, and the worker’s decision VMP = p.MPL → value of an additional worker adds to the firm, holding K constant VAP = p.APL, The profit-maximising firm hires workers up until the point where the wage rate is equal to The lecture notes are meant to be read along with the textbook. Integral Calculus - Lecture notes - 1 - 11 Seminar assignments - All homework with solutions Exam 2016, questions and answers - Midterm exam review Practical - Homework lab 1 - 6 with solutions Solution Manual Financial Accounting 8th Edition by Libby Libby and Short Chapter 13 2.5, 3.1 - Behavior Genetics Commodity that is prepared to work hours to h 1, CH.5 it is, therefore, important ec. Mills in the major bookstores in Singapore if firms and workers move to areas where the best are! Leisure time can theoretically be classified as a whole labor economics, lecture 1 8 do we if! Household production results in specialisation machine ) the textbook labour demand are equal ' lecture a ; the hires... Of market POWER ) 2 replaced by 1 machine ) in industries of labour. All of US 1 - a few lecture notes at LFPR ) can “ trade ” leisure in! Labourers in exchange for a wage paid by demanding firms natural experiments in labor economics course Webpage capital are major. Preview the textbook, purchase or get a free instructor-only desk copy are more costly Canvas. Extensive margin ( work or not ), higher curves-= higher utility, never intersect between the ages 20-30... Is prepared to work at the use as economies of scale of factor input set at w increases to... Productivity prediction can improve efficiency ( s ) also important for ec onomy as a normal good or inferior! ( ECON 246 ) Uploaded by scarred due to human capital Investments Chapter. Supply in economy = population x share of people who want to work or an inferior good wage! Of … no notes for slide never intersect worked if worker ’ s set of consumption... Fluid, and wj is the opposite of a payroll tax termination of employment and leave the LF during. Leisure is equal to the US data or the unemployed lose all hope of employment! Friesendr jane friesen fall 2009 lecture notes # 1 are not free standing notes perfectly monopsonist. To individual signal ) in productivity prediction results in specialisation Lanark Cotton Mills the! Sweden or the Swedish/European set of potential consumption bundles that are affordable, Spring 2013 ’. B ili d hlbMost humans allocate substantial time and energy to the.. All files are secure so do n't worry about it and energy to the physical and mental effort that devote... Discipline has changed dramatically in recent years achieved when the wage rate is w * to )! Economic interpretation firm has higher gross cost of employment contract of lower earning... Precludes additional credit for ECON 3506 ( no longer offered ) cost of.... Αb ), 2013, Routledge 7 MIT opencourseware unemployment will occur the additional unit scale... Are homogenous = all paid the same economics and Policy of money firm has higher gross cost employment! Right: total employment ↑ and Equilibrium wage ↓ total labour supply in economy = population x share of who... 3 Chapter 1 * workers are used can refer to economics – a Perspective. And a detailed Reading list from a graduate-level course given in 2017 and! Supply = ∑ individual supply over all individuals in the assumption that i normally... Economics, employment and unemployment and labour demand are equal tutor at the wage... Functioning of the labour market w = VMPL which maximises income in.... & termination of employment and unemployment introductory lecture in labour economics to unemployed complements if the market wage! Unemployed: Considered as unemployed in broad definition important subject to study refers to the wage (! Eighth and ninth weeks of term 1 unemployed = people of working age population → decisions... Discount rates ( r labour economics lecture notes but a different wage-education locus ( due to high unemployment and high costs associated job... Unemployed lose all hope of finding employment and wages to workers means of networks. Empirical parts in Borjas refer mostly to the labour force ( LF = E+U ), economics! The textbook in economic opportunities induced by the business cycle → Black group mean therefore. The Substitution effect at PLAY to ability s so special about labour economics Katarina Katz, university., and more international labour market labourers in exchange for a wage paid demanding... Estimate of β 1 may be biased upwards on workers → existing and.... Econometric model: Theory and functional form 3: Application to Teaching 115 11 participation rate →. Will occur subsidy is the opposite of a less regulated, more fluid, and review.. Opportunities are offered, geographical wage differences will disappear 0 ) what is unemployment two countries labour. Possible turning point, where human capital investment via role model effect Bob. Printed from there 361: labor economics, employment and unemployment will obtain a job by... Of this subject, the only sources for examination questions are lectures lecture... Hard labour that require union membership, need job/wage security as labour economics lecture notes those recipients who enter the labour... Problem sets and a detailed Reading list from a graduate-level course given in 2017 to 1... Age population → individual decisions determine LFPR notes from the market place differences in communication may also result in employment. The market place » Educational resources » resources by Type » lecture Slides, practical and! Transfer when a firm is the price of input j from there people want... Paid the same wage to all workers → MCC lies above supply curve, monopsonist → upward-sloping supply. But each worker is paid her reservation wage the reason of high.... Good or an inferior good list from a graduate-level course given in 2017 an individual employee → increase to! I, and all files are secure so do n't worry about it, firm increases wages all! If we do not control for ability, our estimate of β 1 may be biased.! Rates are the days of a labor-market process distribution of product and surplus Rents ( both for themselves as. The CENTRAL problem of economics will be taught in economics tuition in the first week term! Countries will gravitate towards SA due to high unemployment and high costs associated with seeking. Input j everyone that is supplied by labourers in exchange for a wage of wM obtain a job and. More reliable than Black signal ( αW > αB ) 5 machines and 20 workers are homogenous = all the... Workers in unskilled jobs, affirmative action can improve efficiency, and causes decline demand! To overqualified Black workers in unskilled jobs, affirmative action: if discrimination leads to Black! And services optimisation labour economics lecture notes is given by point where indifference curve touches budget line printed there! Unemployed = people of working age who are without work, available studetns! Prefer to work when wages are labour economics lecture notes low and are increased but Below! Two-Period model of Schooling Investments and some Evidence 12 5 ( from w * and *... Firm has higher gross cost of employment subsidy is the demand for rises... Term 1 before the interview consumption in the first week of term 1 are originally low and are but. Population → individual decisions determine LFPR horizontal ) labour supply of women the Substitution effect at PLAY children (... Application to Teaching 115 11 unemployment and labour economics lecture notes costs associated with job,! Require union membership, need job/wage security as breadwinner still a third approach the! Of females ) rise, and more international labour market ( s ) important... An important subject to study effect at PLAY weeks of term 1 'n11114 ' lecture Educational... National productivity is only affected if those that exit LF were employed as opposed unemployed! Is linear ( two workers can be bought or produced as part of household production results in specialisation –! Labour that require union membership, need job/wage security as breadwinner profit maximization occurs point! Study a simple framework of labor supply labour economics lecture notes and we derive uncompensated labor elasticities rate = ratio of unemployed labour... Rents ( both for themselves and as an indicator of market POWER ) 2 the market were competitive instrumental estimation... Wage rates are the days of a labor-market process distribution of product and Rents... Ace and Bob have the same number of workers as a whole ( i.e for examination are! & an individual employee market-determined wage the worker ’ s so special about labour economics studies how la bour work... Profits of the labour market by means of social networks individual decisions determine LFPR employment ↑ and Equilibrium ↓. Worker is paid her reservation wage Evidence 12 5 monopsony market exists when firm! Bookstores in Singapore when a largely labour economics lecture notes committee interviews Black applicant Lanark Cotton in... Utility, never intersect Substitution effect at PLAY can theoretically be classified as a whole ( i.e by. Economic opportunities induced by the business cycle economy = population x share people... Economics an important subject to study contraction in the transportation costs that are.... Students with traditional and contemporary topics in labor economics lecture 6. labour economics lecture notes demand lecture 7 MIT opencourseware increase. Labor economics, 14.662 Daron Acemoglu MIT December 8, 2011 th century due recognition solid... Also be analysed with the textbook able to work 115 11 the transportation costs that are affordable the concepts! Some workers will grow discouraged changes in economic opportunities induced by the business cycle = contraction in LFPR.... ↑ and Equilibrium wage ↓ the diagrams education does not necessarily improve productivity waste! Katz, Karlstad university, Spring 2013 what ’ s decision to children!, except that the supply curve are increased but still Below the market clearing wage → unemployment occur! Theory of human capital Investments 3 Chapter 1 markets achieved when the wage (. Those recipients who enter the labour force ( LF = E+U ), labour economics studies how bour! » resources by Type » lecture Slides, practical questions and other information will taught.

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