| Labor force is defined as being the
total number of people who are available to work and earn income. This
definition includes everyone who is employed or seeking paid employment, so it
includes employees and the self-employed. Labor is one of the country's
resources which can be combined with other resources to produce the goods and
services required by the community. Though the size of the workforce relies greatly on the size of the total population, there are several other aspects which also affect it. The age distribution of the total population has a very marked effect on the available workforce. If the population has a high proportion of very young people or of those too old to work, then the available workforce would be lower than if there were an evenly spread age distribution. If the population grows rapidly from natural increase, i. e. the number of births greatly exceeds the number of deaths, then as a total population increases, the proportion in the workforce declines. Sometimes a population is described as aging, which means that the birth rate is either falling or growing very slowly, and as people retire from the workforce, there are inadequate numbers of young people entering it to take place of those who are leaving it. The population is top-heavy with older people. So the percentage of the population in the workforce declines when there is either a rapid increase in births or a falling birth rate. The age distribution of the population has several important influences on the economy. If the population is aging and there is an increase in the number of people retiring without a corresponding increase in the number entering the workforce, this raises the problem of the ability of the economy to provide a reasonable level of social services to the retired group. If the aged are to be cared for in special homes or hotels, finance must be available for that purpose. If the size of the workforce is small relative to the total population, then the government tax receipts are relatively low and either the government has less money available to it or the workforce members have to be taxed more heavily. |