Labor market

Labor market

Labor economics is a branch of economics that focuses on studying and analyzing the behavior of business owners and the workforce. Labor economics can be viewed as a combination of microeconomics and macroeconomics of the labor market.

Labor economics addresses several basic topics, including:

  • Workforce.
  • Worker productivity and wages.
  • The unemployment.
  • The decision to join work or immigrate.
  • The role of education and training in improving workers’ efficiency.

The labor market is known as a type of economic market, as it is considered a virtual market, and it is not necessarily a specific place or time. The labor market represents the intersection of labor supply by companies and demand for labor. The labor market consists of labor supply and demand, which interact to determine the number of workers and the level of wages.

There are many indicators related to the labor market, including:

  • Labor force index.
  • Unemployment index.

Unemployment is defined as a person who is able and willing to work, but in vain or compulsory employment in part of the labor force, despite the ability of this force to work and produce. Unemployment is among the important economic indicators to take into consideration. An increase in unemployment rates in a country affects the economy of that country and can lead to an economic recession. There is a natural rate of unemployment, and if unemployment rates are greater than the natural rate, this affects production and potential GDP, and may trigger an economic cycle.

There is an inverse relationship between inflation and unemployment, with the Phillips curve showing the relationship between them. Unemployment rates must be within natural unemployment rates to avoid inflation.

The following table shows unemployment rates in the Gulf countries and Egypt:

Unemployment rate Country
5.8% Kingdom of Saudi Arabia
3.9% The United Arab Emirates
1.% Qatar
14.2% Iraq
3.1% Oman
3.70% Kuwait
7.2% Egypt

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