Coverage Of Labor Economics

Coverage of Labor Economics: Labor economics encompasses many of the most important issues in economics. Most people earn most of their income by selling their labor time. So labor economics deals with the major source of personal income, what determines it, and why it may differ for different individuals. It also deals with the allocation of the most important (in value terms) input into the production process. From a formal context, Labor economics is the field of economics, which examines the organization, functioning, and outcomes of labor markets; the decisions of prospective and present labor market participants; and the public policies, which relate to the employment and payment of labor resources1. Labor economics, as one of the major sub division of economics focuses its attention upon the economics aspects of the problems, insecurities and institutional development associated with labor. Labor economics involves analyzing the determinants of the various dimensions of labor supply and demand, which interact to determine wages, employment, and unemployment. There are many dimensions to labor supply, including demographics (the effects of birth and date rate), immigration and emigration policies (perhaps a brain drain), the labor force participation decision, the hours of work decision (including overtime and moonlighting), education and training (human capital decisions), and the disincentive effects of income maintenance and unemployment insurance policies. Labor demand focuses on how firms vary their demand for labor in response to changes in the wage rate and other costs, including fringe benefits, legislatively imposed costs, and the quasi-fixed costs associated with hiring and training workers. Since labor demand is a derived demand (derived from the demand for the firm's output), it is also influenced by factors such as free trade, global competition, and technological change. Labor market outcomes are also influenced by the type of market structure (the degree of competition), union collective bargaining and various government laws (such as minimum wage laws). In recent time, labor economics has become increasingly empirical, with less emphasis on theory. Among the areas growing or receiving the greatest attention are changes in the wage structures (including occupational, industrial and regional wage differentials, union/non-union wage differentials, and male/female wage differentials, the issue of sex discrimination in the labor market), the economics of education, social interactions and personnel economics. The range of topics studied by labor economists today has broadened far beyond those of traditional labor economics.

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Campbell R. McConnell, Stanley L. Brue, David MacPherson (2005), Contemporary Labor Economics