A labor market is any institution or arrangement which brings job seekers and employers of labor together within a particular geographical region. We can therefore talk of the local labor market, national labor market and international labor market.

Concept of Labor Force


A labor force is defined as the number of people between the ages of 15 and 60. It is often referred to as the working or active population. It is the number of people who are by law allowed to work and are willing to work.


The size of the labor force is determined by: 

  1. Customs regarding the legal minimum age.
  2. The school leaving age — age of entry into the labor force.
  3. The age of retirement.
  4. Customs regarding women working outside the homes.
  5. Age distribution of the population.
  6. Proportion of the population that is made up of invalids.
  7. The size of the population.

Efficiency of Labor 


Efficiency of labor is defined as the ability or capability of a worker to produce a maximum output with a given quantity of inputs and within a given period of time.

Factors affecting efficiency of labor 

  1. Better education and training make labor more productive.
  2. Efficiency of other factors of production such as finance and management will increase the efficiency of labor.
  3. Improved production methods will enhance the efficiency of labor.
  4. Better management leadership style will motivate labor for higher productivity.
  5. Better workers — Management relations will promote higher efficiency of labor.
  6. A suitable working environment induces people to work better.
  7. Better workers morale and job satisfaction produce incentives to work harder.
  8. By providing appropriate and basic incentives, workers will be encouraged to perform more satisfactorily. 

Labor Mobility 


Labor mobility means the ease with which labor can move both geographically and occupationally. Such movements are of two types: 

  1. Geographical Labor Mobility — Movement over space i.e. from one area to another e.g. people from Ibadan, Enugu, etc, moving to Lagos. 
  2. Occupational Labour Mobility — This can take two different forms,
    1. Horizontal or lateral mobility — This is the movement from one occupation to another such as movement from engineering to sales profession.
    2. Vertical Mobility — This is the upward movement along the professional line by promotion. For example an Accountant becoming a Senior Accountant and later Chief Accountant or Finance director.

Factors affecting geographical labor mobility 

Encouraging factors 

  1. Good climate attracts people.
  2. Better economic prospects attract job seekers.
  3. The friendly attitude of host countries or communities normally attracts strangers.
  4. The presence of one’s relatives or friends is a source of attraction to other members of the family.

Discouraging factors

  1. Unwillingness to part with relations and a familiar environment for an unknown place reduces the scale of movement of people.
  2. Long distance and transportation costs discourage people.
  3. High cost of living in the proposed place delays movement.
  4. Age and other social abilities limit the number of people who can move.
  5. Government’s discriminatory employment policy may discourage people who would normally have moved.
  6. Religious and other cultural factors may discourage people from movement.
  7. Language barrier is a deterrent to movement.
  8. Difficult immigration requirements.

Factors affecting occupational mobility 

Encouraging factors 

  1. Significant income differences among various occupations may attract people to high paying jobs.
  2. Adequate supply of professional training institutions makes it easier to move from one occupation to another.
  3. Job dissatisfaction encourages people to find alternative employment.
  4. Poor career guidance may lead to frequent job changes.

Discouraging factors 

  1. Difficult membership conditions required by professional associations make entry into certain professions very difficult.
  2. Limited opportunity for professional development hinders labor mobility.
  3. Lack of appropriate or market relevant skills makes it difficult for people to change jobs.
  4. High cost of required training limits the number of qualified people for certain jobs.
  5. Holders of jobs that are trained and with specific skills find it difficult to change their occupation.
  6. Trade unions regulate entry into some professions or occupations.

Supply and Demand for Labor 

Supply of labor 

The supply of labor means the quantity of labor that would be offered for service at alternative wage rates. The supply of labor is based on the assumption that workers are willing to supply more units of labor at higher wages and vice versa.

Factors affecting supply of labor

  1. The size and structure of population will determine the size and structure of the labor force.
  2. Government regulations concerning entry age requirements will affect the size of the labor force.
  3. Wage rates will affect the supply and demand for labor. The lower the wage rate the lower the supply.
  4. Educational facilities for skill training and development influence the structure and skills of the labor force.
  5. The religion and culture of the people will affect the supply and demand for labor.

Demand for labor 

Demand for labor is defined as the number of units of labor that employers would require at varying wage rates. The demand for labor is said to be a derived demand. That means that the demand for labor is derived from the demand for the product which the labor helps to produce. The higher the demand for such products, the higher the demand for labor. 

Factors affecting the demand for labor 

  1. Level of economic activities, the higher the tempo the higher the demand for labor.
  2. Wage rates; the higher the wage rates the lower the demand for labor, other things being equal.
  3. The price of what labor helps to produce and the elasticity of the demand for such products, influence the demand for labor.
  4. Sex preference; some employers prefer one sex to another. On the other hand, various professions offer differential attraction to the sexes .

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By Teezab

His name is Tiamiy Abdulbazeet. He is a writer and loves to write about Education, and all types of news. If he is not writing, then know that he is playing a game!😃

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