Topic 1 Defining the labour market

Definition: A labour market is the place where workers and employees interact with each other. In the labour market, employers compete to hire the best, and the workers compete for the best satisfying job.

Description: A labour market in an economy functions with demand and supply of labour. In this market, labour demand is the firm’s demand for labour and supply is the worker’s supply of labour. The supply and demand of labour in the market is influenced by changes in the bargaining power.