Labour Economics

5713 Words Sep 17th, 2012 23 Pages
Q2.Define “Labour Economics”. Explain the nature and scopeof Labour Economics. Explain the characteristics of Labour?
Ans: -Labour Economics:-

“Labour Economics may be defined as a study of theorganization, institutions and behavior of the labour market in anindustrising or industrial economy”.

According to Dole Yoder:-
“Labour economics or manpower economics is primarilyconcerned with efficient utilization and conservation of manpower and resources. It studies and seeks to understand theprocesses by which manpower is applied and utilized in modernsociety. It is concerned of natural resources in the land”.

Scope of Labour Economics:-
Labour economics has to deal with may be stated as manpowerplanning, labour
…show more content…
How would youdistinguish between ‘Nominal Wages’ and ‘Real Wages’?Explain the factors influencing real wages.
Ans: -Wages:- The price paid for the services of labours in production is calledwages. The labourer is generally paid a certain sum of moneyper day or week or month.

Beham defined a wage as“A sum of money paid under contract by an employer to aworker for services rendered”.However, in economics, payment made for all kinds of services,whether by way of salaries or in any other way is included inwages.

Differences between Nominal wages and Real wages:-

Nominal Wages:- The amount of money that a labourer gets in exchange of hisservices is called money wages or nominal wages. If a labourergets Rs.200, a day for his work, his money or nominal wages willbe Rs. 200. However, mere money payment does not reflect thereal earnings of the labourer. They do not reveal the standard of living or the goods and services which labourer can buy andconsume.

Real Wages:- The amount of goods and services that labourer can get with hisnominal wages is called real wages. Real wages refer to thegoods and services, which the money wages can buy, andadvantages and disadvantages associated with the jobs.Labourer is not so much interested in money wage as they are inreal wages because their standard of living depends on realwages. According to Wicksell, real wages means real income.Real Income= Money income/Price Level

Following are the factors or items that are