Population Size and Income per Capita
Discuss whether an increase in a country’s labour force will increase income per head.
Labor Market and Income Distribution
Frequently asked question
- Definition of labour force
- Importance of labour force in economic growth
II. Reasons why a larger labour force may enable economic growth
- Division of labour/specialisation
- Economies of scale
- Reduced average costs of production
- Increased sales and output
- Reduced dependency ratio
III. Reasons why a larger labour force may not enable economic growth
- Population growth exceeding labour force growth
- Lack of demand for labour
- Decline in labour force quality
- Increased competition in labour market
- Importance of balancing labour force growth with other economic factors
- Need for policies to address potential negative effects of labour force growth.
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