1. What is Labour Economics?
Labour Economics may be defined as a study of wages and employment in the labour market, and the distribution of income among individuals and households. Labour Economics looks at * Labour market processes
* Size of the labour force
* Trade Unionism
* Labour Legislation
* Factors affecting employment/ unemployment/underemployment * The demand and supply of labour
2. Law of Derived Demand. Explain
Marshall’s law of derived demand states that the elasticity of demand for labour increases as:
* The elasticity of supply of capital increases
* Labour’s share of total cost increases
* The elasticity of demand for output increases
3. Labour Market Forces and Labour Market Processes. Explain Labour Market Process includes how labour markets work, the nature of the cause-and-effect relationships in the labour market, and the major stakeholders in the market. Labour market process involves three forces, and these are:
* Market forces of supply and demand. On the demand side, businesses actively compete for workers of a particular skill or trade. The supply side is made up of all persons who are working or looking for work. * Institutional forces represent the influence of various organizations such as unions, governments, corporations, and small businesses on the pricing and distribution of labour. * Sociological forces which represent the influence of social groups and norms on the determination of wages and the allocation of labour. Sociological forces impact in two ways; first, who can compete in particular labour markets; second, determination of wage rates in the market
There are three (3) types of unemployment:
* Frictional Unemployment - is when workers leave their jobs to find better ones. It's usually thought of as a voluntary exit, but can also occur as a result of a layoff or termination with cause. The time, effort and expense it takes to find these new jobs are...
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