Labour market theories

Labour market theories explore how employment and wages are determined. They consider factors like supply and demand for workers, wages set by employers, and worker skills. Some theories suggest wages adjust to match the value workers bring, balancing job availability and worker availability. Others examine the role of government policies, unions, and market imperfections. Overall, these theories help explain how job opportunities, wage levels, and employment rates are influenced by economic conditions, worker characteristics, and institutional factors, providing a framework for understanding how labour markets function in society.