Definition
- Labour market
- A labour market is the market for one type of labour, defined by the kind of work, the skill level and the location.
- Not to be confused with: Perfectly competitive labour market
- A perfectly competitive labour market is one where neither workers nor employers have market power, so a firm can hire all it wants at the going wage.
Test yourself
What is the difference between labour market and perfectly competitive labour market?
Perfectly competitive labour market: A perfectly competitive labour market is one where neither workers nor employers have market power, so a firm can hire all it wants at the going wage.