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Labour – Human resources determined largely by the size of the working population

Labour force refers to the physical and mental effort of the working population, which
consists of people who are available for paid employment and unemployed people of
working age and below retirement age, excluding categories such as full-time
students, caregivers, and the long-term sick and disabled. In macroeconomics
statistics, the labour force is the sum of all employed or unemployed workers.

The size of a labour force can vary between countries. Factors that affect the size
include the number of births 16 or more years previously, number of deaths,
proportion of individuals working or looking for work, the number of foreigners
coming into the country to work and population size.

Birth and Death Rate affect the size of labour force such that lower birth rate results in
an ageing population in which there is an insufficient number of people to participate
or be considered into the labour force. This is evident in many developed countries
namely Singapore where there are less and less people in the labour force and have
thus embarked on measures to ensure that people work well into their old age to
ensure that the economy is good. Such that Singapore is planning to increase
retirement age from 62 to 65 in 2012, relative to higher life expectancy.

Since labour force refers to employed and unemployed people of working age and
below retirement age, the age distribution of a country can also comes into
consideration. Singapore for example, would have a decreasing labour force, as it is
an ageing population, and the number of employed and unemployed people of
working age and below retirement age is getting lower.

For example, a country with a large population would naturally have a larger size of
labour force as compared to a country with a small population. Also government
policies and incentives that are able to attract foreigners to work in the country can
affect the size of the labour force. Such that, if the country has a stable government
and offers better job prospects to foreigners, foreigners may immigrate and work in
that country increasing the size of the country’s labour force.

Countries with a large labour force may not necessarily mean that it
is doing well economically. This is because the efficiency and
productivity of labour in the country may not be high. Efficiency and
productivity of labour refers to a country producing the maximum
amount of output (consumer goods or producer goods) using all the
possible input (resources) at a fast rate. OR Labour productivity is the
quantity of output per time spent or numbers employed. Could be measured in, for
example, Singapore dollars per hour.

A country may have the resources and labour force to produce a certain amount of
goods, but it can choose not to produce lesser of a good than what it actually can. This
leads to factors that affect a country’s efficiency of labour.

The factors include the number of participating labour force (people who are
employed and paid for their work), wealth of a country, government incentives,
natural disasters, literacy rate, culture and mobility of labour. Government incentives
motivate workers to work harder thus increasing productivity and efficiency.
Mobility of labour has various meanings, a few of which are, freedom of workers to
practice their occupation wherever opportunity exists to the extent where workers are
able to or willing to move between different jobs, occupations and geographical areas,
flexibility of trade between countries.

Mobility of labour allows the participating labour force to be open to wider


opportunities and job prospects. Such as trade relations with other countries can create
a need for a certain type or product to be produce, this would increase productivity of
labour.

Division of labour or also known as specialization is the


specialization of cooperative labour in specific, circumscribed tasks
and roles intended to increase productivity of labour.

Through division of labour, each worker in a firm or company can concentrate on


what they are good at and build up their expertise, becoming specialists. Specialist
workers become quicker at producing goods increasing productivity of labour as the
production per good becomes cheaper because of this, increasing profits.

Although it may increase productivity, it is risky because if a country relies only


focuses on one production area, when the product is not demanded, the country’s
economy may fall, due to little diversification. Also, workers may be less motivated to
do work as there is no variety in jobs. The economy of the country may suffer if the
sectors of a country are not diversified when the specialised sector fails.

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