Methodological Issues in Labour Economics: Procedures for Procedural Rationality?

This paper examines methodological issues in labour economics, by examining the claim that it is moving closer to notions of procedural rationality advocated by Herbert Simon. A content analysis of the Journal of Labor Economics shows that the orthodox methodological perspective of deductivism has a strong hold in labour economics, and the nature of the empirical work is also allied to this perspective, casting doubts as to whether labour economics has moved towards procedural rationality. The paper then explores the possibilities of a bridge between labour economics and the schools of institutional labour economics and industrial relations. The paper argues that the former needs to borrow in a more constructive way from the latter in order to construct the procedures for procedural rationality.