Labour Economics Theories: A Review of Literature

Jadhav, Atharva (2013) Labour Economics Theories: A Review of Literature. Masters thesis, Indian Institute of Science Education and Research Kolkata.

Text (MS dissertation of Atharva Jadhav (18MS044)) Thesis_18MS044.pdf - Submitted Version Restricted to Repository staff only Download (1MB)

Abstract

Labour as an important component in the production system is discussed in economics literature to a great extent. It is discussed in both the micro and macro-economic theories. While the discussion of labour dates back to the works of Adam Smith (1776) in The Wealth of Nations, the understanding of labour rights stems from the seminar works of Karl Marx. With the development of different schools of thoughts in political and economic theories, the ideas of labour have also evolved from merely a factor of production to human capital and a valuable resource in the country’s growth. This report attempts to discuss and explain different concepts and theories in the economics literature. While section 2 discusses the concepts of labour in the circular flow of national income, section 3 discusses the labour demand and supply aspects in microeconomic theories. Section 4 discusses labour in the aggregate demand and aggregate supply models. Section 5 explains the sticky wages and inflation-unemployment relationships. Finally, section 6 highlights the role of labour in growth theories. In this context, I have summed up Solow Model. Section 7 pens the way forward.

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