labormarket

Labor market refers to the relationship between the supply of and demand for labor in an economy. It is the mechanism through which workers offer their labor in exchange for wages, benefits, and working conditions, and through which firms hire labor to produce goods and services. Key outcomes include employment, unemployment, and wage levels. The labor market is shaped by the interaction of workers and employers, with wages acting as the price signal that coordinates decisions.

On the supply side, the pool of workers is determined by population size and growth, age structure, educational attainment, skills, and work preferences. Immigration and geographic mobility also affect supply. On the demand side, employers hire based on expected productivity, output demand, and the costs of labor relative to other inputs; technology and automation can substitute or complement labor.

Markets can be broadly competitive, but many labor markets are segmented by occupation, industry, region, education, or demographics. Indicators used to assess labor market health include the unemployment rate, labor force participation rate, job vacancy rates, and wage growth. Data come from household surveys and establishment surveys, often compiled by national statistics offices and international bodies such as the ILO.

Policy aims range from reducing unemployment and underemployment to promoting wage growth and mobility. Instruments include education and training programs, unemployment benefits, and active labor market policies, as well as minimum wage laws in some economies. Global trends such as automation, offshoring, globalization, and demographic change continually reshape the labor market.