What does a Labor Economist do?

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  • Written By: A. Garrett
  • Edited By: John Allen
  • Last Modified Date: 13 November 2019
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Labor economists study how the supply and demand for labor impacts the relationship between employees and employers. A person with this position may analyze how the availability of laborers affects the wages an employer pays. Also, a labor economist may seek to determine the causes of unemployment. Salary trends and demographic changes such as the age of the workforce and availability of cheaper forms of labor provided by unskilled workers or immigrants are two other issues that influence the labor market and are studied by a labor economist. Private companies and governments most often hire labor economists.

Usually, labor economists focus primarily on the population that is eligible to participate in the workforce; this group is called the labor force. To meet his requirement, the subjects studied must be of legal working age in accordance to the laws and policies of the country or municipality where they live, they must not be in the military or physically or mentally incapacitated, and they must have jobs or be in the process of actively seeking work. A labor economist uses this information to measure the health of the labor market and hypothesize about its future.


Labor economists determine whether wages will rise or fall by reviewing certain characteristics of the labor force. Members of the labor force may earn higher wages if the jobs they are working at or seeking require the advanced skills, expertise, or education credentials that they possess. If a certain position requires little skill and has a high number of potential laborers waiting to fill it, wages may decrease. Furthermore, a labor economist studies how immigrants of a certain skill or background affect the labor market.

Unemployment is another aspect of the labor market that labor economists focus on. By subtracting the number of people currently employed from the number of people comprising the entire labor force, a labor economist can determine the unemployment level. Furthermore, labor economists devise the unemployment rate for a community by dividing the level of unemployment by the entire labor force.

People seeking work in this field may be hired by companies seeking information about their hiring or payment practices or by governments seeking information on the wages and employment prospects of their citizens. A bachelor’s degree in economics is a minimum requirement for the position and some employers require master’s degrees or doctorate degrees. Labor economists must also be skilled speakers and writers because many of their findings will be presented via oral or written reports.


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