HRM 221: LABOUR ECONOMICS

Contact hours: 30 hours

Introduction
This course introduces the learner to labour economics. It aims at introducing learners to principles, concepts,
and appreciation of labour economics relevant to human resource management. The course mainly
emphasizes on; foundations of labour economics labour markets, labour productivity, labour supply, wage
management, Trade unionism, Labour market failures, employment and unemployment, human capital
investment and, emerging issues in labour economics.
Course objectives
At the end of the course the learner should be able to apply and demonstrate understanding of labour
economics use and apply principles of labour economics in decision making on issues related to HRM to
promote labour efficiency and effectiveness and minimise cost.
By the end of this course, the learner should be able to;
1. Acquire knowledge in labour economics to be able to use and analyse labour for Human resource
managers
2. Demonstrate understanding and applicability of labour economics concepts/theories and principles in
decision making and development of human resource
3. Demonstrate ability to identify the core contribution of labour economics as well as their limitations in
human resource development
Course Content
1. Introduction
Meaning of labour economics
Origin and Scope of labour economics
Population - Growth, size and structure and problems related to labour supply
Overview of Labour markets
2. Production
Meaning of production
Factors of production
Importance of labour in production process
Law of variable proportions
Economies and diseconomies of scale
3. Labour productivity

Labour Productivity and its significance

Productivity determinants of productivity and factors inhibiting productivity
Measurements of labour productivity improvements in developing countries e.g. Kenya
4. Labour markets
Demand for labour and its determinants
Supply of labour at micro and macro levels
Elasticity of demand and supply for labour
Perfectly competitive labour market and Imperfect labour market structure
Equilibrium in labour market
5. Wage management
Overview of wage management
Wage structure by occupation, gender and region
Labour mobility
Theories of wages
Wage determination in perfectly competitive labour market
Wage differentials
6. Trade unions and collective bargaining
Trade unions in perfectly competitive markets
Trade unions vs. monopoly of employers
Trade unions powers
Influence of trade unions and collective bargaining on wages
Trade unions movements in Kenya and workers welfare
Collective bargaining
7. Employment and unemployment
Employment and its importance
Theories of employment - Classical Keynesian and extension of Keynesian theories
Types and causes of unemployment
Control measures of unemployment
Underemployment
8. Human Capital Formation
Its Meaning and importance
Sources of human capital acquisition and constraints
Investments in Human Capital: education and training.
Women and the acquisition of human capital
cobweb model of education
9. Emerging issues in labour economics