Labour Eco

Notes

Labour Economics: This is the study of the labour force as an element in the process of production. It is a branch of economics which studies how the market for labour operates with a view to understand the interactions between workers and employers. Labour economics basically looks at the suppliers of labour services (workers), the demanders of labour services (employers) and attempts to understand the resulting patterns of wages, employment and income . Labour economics is the study of the functioning and dynamics of markets for wage labour. It analyzes how labour services are supplied by individuals and demanded by firms, and how wages, employment, and income are determined. According to Richard Layard and Stephen Nickell,“Labour economics is concerned with the behavior of employers and employees in response to the general incentives of wages, prices, profits, and working conditions.” Nature of Labour Economics • Microeconomic Aspect: Focuses on individual workers, firms, and their decisions regarding employment and wages. • Macroeconomic Aspect: Deals with aggregate employment, unemployment rates, and wage levels in the whole economy. Importance of Labour Economics • Helps unde...