Concept of the Labor Force

Labor force Labor force is the total number of persons available to supply the labor for the production of economic goods and services. In other words, it is the total number of people of working age in a country who are able and willing by law to work. It is the active or working population and it comprises all persons who have jobs and those who are seeking for jobs in the labor market. They are normally found between the age bracket of 18 to 65 years. Working population varies from one country to another. To be a member of the labor force, one must be of working age (18-65 years), be able-bodied, ie, not handicapped either.Mentally or physically, and must be willing to work. Persons that are not members of the labor force include: †¢ Children of school age (0-17 years) †¢ Elderly (above 65 years) †¢ The handicapped (either physically or mental) †¢ Persons even though they are able-bodied but are unwilling to work. Demand for Labor Demand for labor is the total number of workers employers are willing and ready to employ or hire at a particular time and at a given wage rate. The demand for labor is a derived demand, because labor is not required for its own sake but for what it can help produce. Factors affecting the demand of labor are: . The size of market: The size of the market for goods and services produced determines the demand for labor. The larger the market, ie, the greater the production of goods and services, the higher the demand for labor to produce the required goods and services. 2. Number of industries: The higher the number of industries that produces the needed goods and services, the higher the demand for labor 3. Wage rate of price of labor: The demand for labor by employers depends on the price at which labor is offered for sale (by workers). If labor is willing to take a low wage rate, the demand for labor will be high. 4.Availability of other factors of production: If other factors of production such as land and capi tal are available in large quantity to produce the required goods and services, there will be a corresponding high demand for labor. 5. Efficiency of labor: If the efficiency of labor is high, there would be high propensity for employers to engage more labor and vice versa. 6. Demand for goods and services: The demand for goods and services in a country can stimulate an increase in the demand for labor. 7. Nature of Industries: The nature o industries- whether it is capital-intensive or labor-intensive will determine the demand for labor.The labor-intensive industries will lead to high demand for labor. 8. State of employment: The state of employment determines the demand for labor. If the economy has reached full employment, there will be little or no demand for labor but if it is under-employment, there will be need to demand for more labour. Supply of Labor Supply of labor is the total number of people of working age offered for employment at a particular time and at a given wage rate. In other words, supply of labor can be referred to as the services of labor available in the labor market. Factors affecting the supply of Labor or size of Labor force are as follows: 1.Size of population of a country: The larger the population, the greater the number of labour to be supplied. 2. Official school leaving age: If the school leaving age is low, the proportion of labour force will be high. 3. Retirement age: The age of exit in public employment will determine the labor force. The older the age, the more the supply of labor and vice versa. 4. Pursuit of higher education: Many people in their pursuit of higher education, go beyond the official entry age into the labor force. 5. Age structure of the population: The structure of a country's population is a significant determinant of the size of the labor force.The lower the dependent people, the higher the supply of labor force will increase in a country with a greater number of its people between the ages of 18 and 65 years. 6. Role of women in the society: In some societies, women are usually prevented from engaging in gainful employment because of religious belief, social and cultural factors and this affects the size of labor force. 7. Number of working hours and working days: The number of working hours per day and the number of working days in a week of year also helps to determine the supply of labor. 8.The number of disabled: When the number of disabled persons in high especially within the working population, the supply for labor will be low. 9. The number of people unwilling to work: There are certain number of able-bodied people who are also between the age bracket of 18 and 65 years but are unwilling to work. If their population is high, it will affect the size of supply of labor. 10. Migration: The rate of migration can also affect the size of labor force. If the rate at which the working population leaves a country is higher than rate at which people come in, it will lead to reduc tion in the supply of labor. 1. Trade union activities: The activities of trade union may also affect the supply of labor. For example, when a long period of training is imposed on a certain trade, this may discourage people from engaging in such trade or profession leading to a reduction in supply of labor. 12. Government Policies: Certain government policies can affect the supply of labor. E. g, specific laws are made to exclude children and women from working in ministries. This can reduce the supply of labor to that are or field. 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