Labor economics

Labor economics is the specialized branch of economics that studies labor supply and demand, defines and measures employment and unemployment, and evaluates the effects on firms and the broader economy of economic policies designed to address unemployment.

Labor economics attempts to understand the market and the dynamics of the world of work. The labor market functions through the interaction between workers and employers. The science of labor economics looks at labor providers (workers), employers (in English the employers), and tries to understand how wages, employment and profits can be regularized.

This is a very important subject because unemployment directly and painfully affects much of civil society. The goal of many modern governments is to strive for the maximization of Employment, or at least to achieve a minimum level of unemployment; in this regard it is considered physiological if it is 2-3 % of the Labor Force. This % identifies the amount of Labor that finds difficulty in “matching” Supply and Demand, due to the so-called “job search” phase. It also studies the impact of wage pattern (fixed, variable, mixed) on the structure of the labor market.

Labor economics is also concerned with the relationship between the labor market and the world of education. It is concerned with whether there are relationships between productivity levels, educational attainment, the quality of employment contracts and wage differentials between different types of workers. Unemployment levels in fact, like wage levels, cannot disregard the skills (‘abilities’) possessed by the population of workers and any public interventions cannot fail to take them into account.

Labor economics is concerned with determining under what conditions training, general or specific, can be financed by workers, public institutions, employers, or, for example, temporary agencies.

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