Labor and Demographic Economics

The role of labor costs in the economic system: a methodological aspect

Authors: Popova N. K.


Theorems by Heckscher–Ohlin, Stolper–Samuelson and Rybczynski underline production factors’ influence on work force cost. Changing structure of economic system elements provokes work force promotion in capital and labor-intensive branches of economy. In the modern conditions it is marked out expenditures decrease on restoration of work force, reduction of social and household services’ availability. Natural change in demand and offer at labor market provokes appearance of new forms of occupation with the influence on work force cost. Functioning of economic system is carried out taking into account natural and climate conditions. Work force as creator of new cost (additional and consumer) needs conditions for support of working capacity during period of labor activity. Financial inflow promotes work force development. Concentration of capitals and financial flows defines career choosing and planning. Being a part of production, sometimes work force can lag behind from renovation process and modernization of production cycle because of problems with education quality; it influences unemployment rate. The factors define work force cost: economic development of regions, branch of enterprise, correlation of employed and unemployed people number.

Key Words

Wealth, qualification, capital, production, good, capital, labor intensity, capital intensity, employment, unemployment.