Definition of labor in economics:

Labor is the second factor of production. Also it plays a crucial role in the production process.

“Any mental or physical work done for the sake of reward is known as labor”.

Characteristics of Labor:

Following are the few characteristics of labor:

Labor cannot be Stored:

Labor cannot store his power to utilize it in his old age.

Difference in Abilities:

Labors can be different in their abilities as well as in their efficiency. More efficient will get more wage.

Weak Bargaining Power:

As labor cannot be stored so the labor has less bargaining powers that’s why they agree for work even on fewer wages.

Labor cannot be separated from Laborer:

Labor is a skill of laborer, so it cannot be separated from laborer.

Factors Influencing Labor:

Following are the few factors which can affect the efficiency of labor:

Physical Health:

Physical health of the labor is very important factor which can cause very bad effects on the efficiency of labor.

Skill:

The efficiency of the labor also depends on the working skill of the labor.

Moral Values:

Moral values can also affect the productivity; more loyal and honest labor will work harder which will cause a good effect on the productivity of the good.

Working Environment:

Better working environment will cause good effects on laborers and can increase the productivity of the goods

Level of Wages:

If the owner of business is giving high wages to his/her labors than the laborer will work more efficiently.

Political Condition:

Political conditions of the region can also cause good or bad effects on the production process (laborer).

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