NABTEB Economics 2022 Theory — Question 4

Model answer

(a) Labour force can be defined as the total number of individuals or people who are capable and qualified to work in an economy; it is the total number of people of working age in a country who are able and willing by law to work. It is also known as the working/active population. Efficiency of labour, on the other hand, can be defined as the ability of labour to increase the level of output or productivity without a corresponding increase in the quantity of labour used. It is measured in terms of the increase in the level of output within a specified period of time, without a fall in the quality of goods and services produced. (b) Factors that determine the size of the labour force in a country: 1. Age structure of the population: the age structure of a country's population is a significant determinant of the size of the labour force. The lower the dependent population, the higher the labour force, and vice versa. In other words, the labour force of a country will increase as more people fall within the working ages (e.g. 18 to 65 years), although this varies from country to country. 2. Number of working hours and working days: the number of working hours per day and the number of working days in a week or a year is also a determinant of the size of the labour force. If working hours per week are too many, people will be discouraged from joining the labour force. 3. The number of disabled persons: since disabled individuals are not included in the labour force even if their ages fall within the working population, the higher the population of the disabled, the lower the size of the labour force, and vice versa. 4. Emigration: emigrants are people who move out of a country to settle down in other countries. The higher the level of emigration, the lower the size of the labour force of the native (home) country, and vice versa. 5. The activities of trade unions: this also affects the size of the labour force in a country. For example, if a trade union attaches strict conditions to entry into a particular job/profession, this may discourage people from going into such an occupation.