The labor market is an important component in an economy. It deals with the dynamics involved in the demand and supply of labor. In a labor market the workers compete for jobs and employees compete for workers. Age of the population, its education level, and immigration policies, have a major influence on the labor market.
A labor market research helps companies understand the workforce situation in a country or region. Legal aspects related to work hours and salary is also covered in a labor market research report.
Labor market research questions: What goes into preparing a labor market research report?
Following are the labor market research questions which are addressed in Technavio’s latest reports
- How is demographic factor effects participation in the labor force?
According to our industry experts’ demographic factors which have a strong influence on the quality and nature of the labor force are
- Age of the work force: The entry and exit age of the work force. The entry age of the work force is relatively low in the developing economies.
- Sex: Men are more likely to participate in the labor force than women. Recently there has been a slight change in this trend. More women are entering the workforce throughout the globe.
- Race and Ethnicity: According to the data from United States Congressional Budget Office, labor force participation differs by racial and ethnic group. Between 1990 to 2017, Hispanic women between ages 25 and 54 were least likely to be in the labor force, compared to white and black women.
- Birth Cohort: The year of birth also effects the nature of the labor force. Men born in the 1920s and 1930s were more likely to participate in the labor force than the women born in the same period.
- What is the effect of economic conditions and fiscal policies on the labor force?
There is a direct relation between economic conditions and labor force participation. Labor force participation rate tends to decline during economic downturns and rebounds during recoveries.
Fiscal aspects like federal tax and spending policies do have a major effect on the labor force. According to our labor market analysts’ the Affordable Care Act has reduced labor force participation rates.
- How does marital status effect the labor force composition?
It has been found that married men are more likely to participate in the labor force than unmarried men. Married women, on the other hand, are less likely to be part of the labor force compared to the unmarried women.
- Which industry is currently absorbing the labor force?
This is one question which every new investor and company is highly interested to know. Different regions have demand for different type of labor force. The trend keeps changing every five years due to changes in the economic and political policies. For example, post Brexit all the industries in the UK have opened to hiring skilled labor from the third world countries.
- How skillful is the human capital of a country/ region?
The skill level of the human capital is one major labor market research question which interests research analysts. The developed economies have a huge demand for skilled labor. While in most developing economies unskilled labor form a major part of their work force.
- What is the effect of labor force participation on the economy and the budget?
Greater participation of the labor force results in increased production and greater employment opportunities. High labor force participation is also associated with higher tax revenues. Any change in the labor force participation has a direct impact on the unemployment rate as well.
- What is the contribution of the disabled to the labor market?
Those with disabilities have a lower contribution in the labor market. The prevalence of disability can be roughly measured from the Social Security Disability Insurance program data. As more disabled people take up college degree the dependence on disability insurance program comes down. College degrees also increases the contribution of the disabled to the labor market.
- What are the opportunities which will trigger the growth of the labor pool?
For the development of any economy the growth of its labor pool is essential. High demand of workforce is a major reason for increased size of the labor market. But factors like innovation, obsolescence of existing technologies, and emergence of new technologies, also have a positive impact on the growth of the labor pool.
- How will challenges effect the growth of the labor pool?
Often challenges like stringent economic policies and low level of scientific research have a negative impact on the labor pool. This is one problem which is common among several third world country. Governments of these countries are working on overcoming these challenges to empower their labor force.
- How will policy reform help enrich the labor pool?
Our research highlights the importance of congenial fiscal and labor policies for a healthy labor pool. Incidences like “brain-drain” are common in several developing economies. The prime reason for this is the lack of proper fiscal policies. China and India have been two countries which witnessed a major erosion of their labor pool due to non-friendly economic policies.
In case of India, the LPG policy facilitated “reverse brain-drain”. This explains the growth of tech companies and start-ups in India. Thus, policy reforms play a significant role in improving the overall quality of the labor pool.
