Understanding Labor Markets, Employment, and Economic Factors

Wages: Wages are the remuneration for work performed. The demand for labor influences wage levels. The mechanism of job creation is driven by companies. The quantity of labor demanded depends on factors such as:

• The level of wages and the price of goods and services.
• The productivity of the worker relative to the wage level.
• The characteristics of the population.

Employment Policy

Employment policy encompasses a set of plans aimed at reducing unemployment within an economy. Before implementing such policies, it's crucial to understand the characteristics of the population.

Population Characteristics

Population characteristics can be categorized based on their degree of participation in the production process:

• Working-age population: Individuals aged 16 or older who are legally able to work.
• Workforce: Includes both employed and unemployed individuals.
• Employed population: Consists of individuals currently employed, including both wage-earners and the self-employed.
• Unemployed population: Individuals of legal working age who are actively seeking employment but unable to find it.
• Inactive population: Individuals who are not actively participating in the workforce and are primarily consumers.

Employment Statistics

Key employment statistics include:

• Activity Rate (Ta)
• Unemployment Rate (Tp)
• Occupancy Rate (To)

Market Failures

Market failures occur when the market equilibrium (MDC EKILIBRIO) generates a suboptimal allocation of resources. Intervention is justified to improve efficiency. Examples of market failures include:

• Imperfect competition
• Asymmetric information
• Public goods
• Externalities

Welfare State

The welfare state provides a system of social services to citizens, guaranteeing a basic standard of living. It has historically been associated with long-term economic growth. However, declining growth rates have led to government deficits. Measures to reduce public expenditures often stem from policies established by the European Commission.

Capital Market

In the capital market, the remuneration for capital is called interest. The demand for capital comes from traders who need funds to meet their needs; these individuals are called borrowers. The capital demand curve is downward sloping. The supply of capital is formed by household savings, undistributed corporate profits, and public sector surpluses. The capital supply curve is upward sloping. The equilibrium interest rate and the amount of capital exchanged are determined by the interplay of supply and demand for capital.