Definition of Labour
- Labour refers to human effort—both physical and mental—used in the production of goods and services.
- It is one of the four fundamental factors of production in economics, alongside land, capital, and entrepreneurship.
- Labour includes all types of work performed by people in exchange for wages, salaries, or other compensation.
Key Characteristics of Labour
- Human Element: Labour is inseparable from the person who performs it—it cannot be bought or sold like a commodity.
- Perishable: Labour cannot be stored; unused labour on any given day is lost permanently.
- Heterogeneous: Labour varies by individual based on skills, education, experience, and efficiency.
- Mobile: Labour can relocate geographically or shift between industries, subject to economic and social barriers.
- Inelastic in the Short Run: Labour supply does not quickly adjust to changes in wages or demand in the short term.
Types of Labour
- Skilled Labour: Workers with specialized training, qualifications, or expertise (e.g., engineers, doctors).
- Semi-skilled Labour: Workers with some training or experience, often able to perform technical tasks (e.g., machine operators).
- Unskilled Labour: Workers with little formal education or training, often performing manual tasks (e.g., cleaners, loaders).
- Manual vs. Mental Labour: Physical work (e.g., construction) versus intellectual work (e.g., design, management).
Importance of Labour in the Economy
- Labour is essential for transforming raw materials into finished goods and services.
- It contributes to national income through productive work and tax contributions.
- Labour markets influence wages, employment levels, and standards of living.
- Labour productivity—output per worker—is a key driver of economic growth.
Factors Affecting Labour Supply
- Population Size and Growth
- Labour Force Participation Rate (e.g., female participation, youth employment)
- Education and Training
- Health and Well-being
- Migration and Mobility
Labour as the Backbone of Economic Activity
Labour is more than just a factor of production—it is the dynamic force that drives industries, supports families, and sustains national economies. A productive, healthy, and well-compensated labour force is essential for achieving inclusive economic development and long-term prosperity.