One critique of standard economic analysis of labour markets is that it does not account for the importance of social networks in the employment process. This view holds that personal connections are key for both workers and employees. Hence, employees are more likely to apply for jobs where they have a personal connection, and are more likely to be hired if they apply.

More generally sociologists and political economists claim that labour economics tends to lose sight of the complexity of individual employment decisions. These decisions, particularly on the supply side, are often loaded with considerable emotional baggage and a purely numerical analysis can miss important dimensions of the process.

Also missing from most labour market analysis is the role of unpaid labour. Even though this type of labour is unpaid it can nevertheless play an important part in society. The most dramatic example is child raising. Unpaid work is typically ignored because it is difficult to measure and there is no agreed upon method of incorporating it into standard analysis. When the unpaid labour variable is ignored, the model’s conclusions might be biased.

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