Labour and its Features

GP Chudal

Meaning of Labour

In economics, labor refers to the human effort, skills, and abilities used in the production of goods and services. It includes both physical and mental work, ranging from manual labor to highly skilled professional work. In economic terms, labor is considered a factor of production along with land, capital, and entrepreneurship.


The quantity and quality of labor available in a country are important determinants of economic growth and development. The labor market is an important aspect of the economy as it determines the wage rates and employment levels for workers. The study of labor economics examines factors that affect labor supply and demand, such as education and training, immigration, and technology.

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Features/ Characteristics of Labour

  1. Heterogeneous: Labor is heterogeneous, meaning that each worker has unique skills, abilities, and knowledge. This is because labor is not a physical object that can be standardized but rather a human being with its own set of characteristics. Therefore, each worker’s contribution to production is different, and their skills are valued accordingly.
  2. Perishable: Unlike other factors of production, labor is perishable, which means that it cannot be stored. Once a worker’s time has been used, it is gone forever. For example, if a worker is not utilized during a certain period, the wages paid to that work during that time cannot be recovered.
  3. Variable: The quantity and quality of labor can vary depending on various factors such as education, experience, age, and health. This variability affects the productivity and efficiency of labor. Skilled labor is generally more productive than unskilled labor, and experienced workers can perform tasks more efficiently than inexperienced workers.
  4. Human effort: Labor is the physical and mental effort that people put into producing goods and services. It includes not only the time and energy that workers put into their jobs but also their creativity, knowledge, and problem-solving skills.
  5. Subjectivity: The value of labor is subjective, meaning that the market’s demand and supply determine it. The value of labor is determined by the productivity and efficiency of the worker, the demand for their skills in the market, and the availability of labor supply. As a result, workers who possess scarce or unique skills can demand higher wages than those who possess common or easily replaceable skills.
  6. Diversity: Labour is diverse in nature, as there are different types of skills, qualifications, and experiences that workers possess. This diversity can be seen in terms of the level of education, training, and skills required for different occupations. For example, a doctor needs more education and training than a cashier.
  7. Mobility: Labour has the ability to move from one place to another, whether within a country or across borders. This mobility can be voluntary or involuntary and can be influenced by various factors such as job availability, wage levels, and economic conditions. For example, workers may migrate to cities with more job opportunities or to other countries for better wages.
  8. An active factor of Production: Labour is an active factor of production, which means that it involves physical and mental activity to produce goods and services. Unlike land, which is passive and does not require any human intervention, labour is a dynamic factor that requires human effort and skills. The quality of labour depends on the skillset, knowledge, and experience of the workers. In general, labour can be classified into skilled, semi-skilled, and unskilled labour, each with different levels of productivity and wages.
  9. Elasticity: Labour supply can be elastic in the short run, meaning that the quantity of labour supplied can be easily adjusted in response to changes in wages or job opportunities. However, in the long run, labour supply may become less elastic due to family commitments, training costs, or geographical constraints.
  10. Specialization: Labour can be specialized, as workers may develop specific skills or knowledge in a particular field or industry. This specialization can lead to higher productivity and efficiency as workers become more proficient at their jobs over time. However, it can also limit workers’ ability to transition to different industries or occupations.

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