Labour Economics notes – KNEC Diploma



This unit or subject is examined by KNEC on those taking the following courses:


This module unit is intended to equip the trainee with knowledge, skills and attitudes that will enable him/her manage labour market aspects in an organization.

General Objectives

At the end of the module unit, the trainee should be able to:

  • Apply the concept of demand and supply in the management of labour in an organization
  • Determine the cost of labour in an organization
  • Adhere to appropriate procedures for employment of human capital in an organization
  • Recognize the effect of labour mobility on level of productivity of human resources in an organization
  • Relate effects of inflation to productivity of labour in an organization

Topic 1: Introduction to Labour Economics

  • Meaning of economics
  • Scope of economics
  • Types of economic resources
  • Concept of scarcity
  • Meaning of choice
  • Factors of production
  • Meaning of labour economics
  • Importance of labour economics

Topic 2: Demand for Labour

  • Concept of demand
  • Demand for labour
  • Factors influencing demand for labour
  • Concept of elasticity of demand for labour

Topic 3: Supply of Labour

  • Concept of Supply
  • Supply of labour
  • Factors influencing supply of labour
  • Concept of elasticity of supply of labour

Topic 4: Labour Market Structures

  • Meaning of labour market structure
  • Types of labour market structures
  • Characteristics of labour market structures

Topic 5: Labour Productivity

  • Meaning of labour productivity
  • Importance of measuring labour productivity
  • Factors that affect the productivity of labour
  • Methods of measuring labour productivity

Topic 6: Wages and Salary Determination

  • Meaning of wage
  • Meaning of salary
  • Factors that determine wages and salary
  • Wage levels
  • Methods of determining wages and salary

Topic 7: Employment and Unemployment

  • Meaning of employment
  • Meaning of unemployment
  • Factors that determine the rate of unemployment
  • Types of unemployment
  • Causes of unemployment
  • Measures to reduce unemployment

Topic 8: Inflation

  • Meaning of inflation
  • Types of inflation
  • Causes of inflation
  • Measures to control inflation
  • Effects of inflation

Topic 9: Labour Mobility

  • Meaning of labour mobility
  • Types of labour mobility
  • Causes of labour mobility
  • Effects of labour mobility on organizational productivity
  • Techniques of managing labour mobility in an organization

Topic 10: Labour Costing

  • Meaning of costs
  • Classification of costs
  • Concept of labour costing
  • Types of labour costs
  • Methods of calculating labour costs
  • Techniques of labour cost control

Topic 11: Emerging Issues and Trends

  • Emerging issues and trends
  • Challenges posed by emerging issues and trends
  • Ways of coping with challenges posed by emerging issues and trends

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