Studies how labor markets work

Actors in the labor economics

Without us, after all, there is no “labor” in the labor market

Each firm must decide how many and which types of workers to hire and fire, the length of the workweek, how much capital to employ.

Can tax the worker’s earnings, subsidize the training of engineers, impose a payroll tax on firms, enact legislation that makes some labor market transactions illegal

Classifies all persons aged 16 or older into of one three categories: Employed Unemployed Out of the labor force

A person participates in the labor force if he/she is either employed or unemployed.

Gives the fraction of the population that is in the labor force

Gives the fraction of labor force participants who are unemployed

Framework that economists typically use to analyze labor supply behavior This model isolates the factors that determine whether a particular person works and, if so, how many hours she chooses to work

Transforms the person’s consumption of goods and leisure into an index U that measures the individual’s level of satisfaction or happiness.

Defined as the change in utility resulting from an additional hour devoted to leisure activities, holding constant the amount of goods consumed

The impact of the change in nonlabor income (holding wages constant) on the number of hours worked

The predicted relation between hours of work and the wage rate labor supply curve at an hour

The theoretical prediction that people allocate their time over the life cycle

Provides one possible mechanism for a relation between the business cycle and the labor force participation

Argues that many unemployed workers find it almost impossible to find jobs during a recession and simply give up

It refers to the ease with which labor can move from one occupation or geographical area to another. It has two components geographical mobility of labor, occupational mobility of labor

Movement of labor between geographical locations or areas. That is mobility of workers from one region, country and location to another.

It measures the extent to which workers change occupation or skills in response to differences on their wages or job availability

Characteristics of Migrants

Is the single most important factor in determining who migrates

Is the best indicator of who will move within the age group

As the cost of migration gets higher the desire for mobility reduces as a result

It is the market in which wages and conditions of employment are determined. Market system forces of demand and supply determine commodity prices while in the labor market

Number of hours of labour service that the working population is prepared is to offer within a given period of time at a given wage rate

This is the negotiation and the agreement between the employer and the employee

Many developing countries lack of skilled labor Majority of the population is not skilled Most people who are working receive low wage payments Labor is abundant in agriculture, while less in labor industries Government is the chief employer of labor. While the employment by the organize private sector is minimal in such economy Labor force problem is a characteristic of many sefl-employed artisans who are not organized

Exploited and forced to work

Causes of child labor

Children in the child labor category work for many reasons. Children work to ensure the survival of their family and themselves

Many times children seek employment because they don’t have access to schools or good education

In africa, based on cultural believe and traditional believe that women will not fit into native roles if they become educated

Another reason for the increasing rate of child labor in urban areas of developing countries

Ways of tackling the problem of child labor

Is that part of the population which is employed or available for work. It can also be defined as everyone who is classified as either employed or unemployed

Labor input is provided in form of services, the total productive effort available in the economy depends upon a number of factors that leads to the factors that determine the size and composition of labor force