Economics: Labor Productivity Essay

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‘Labour productivity in the construction sector is dependent upon the quantity and quality of resources employed.’ Explain this statement.

Labour economics is most concerned with studying the labour force as one of the prime elements in the process of production. Productivity is the measurement of efficiency, and it is figured by calculating the quantity of goods produced by the quantity of resources, labour and capital that are required to produce them. Some of the resources are more difficult to quantify than others. For example, labour can be easily quantified by counting the number of workers and man hours utilized on a project, and capital outlay expenses are fairly easy to track.

More difficult to figure out are increases in productivity due to factors like increased efficiency of the labour market as employees become more skilled, or utilize better equipment or other resources to improve their efficiencies in the workplace. In industrialized countries, increased efficiency is also seen as economic development; specifically as technology enables surges in efficiency. We can look back on Europe or the United States after developments of steam power, the railroad or the gas motor and see majour advancements in productivity. Likewise, innovations in the 20th century, most notably the assembly line and computers, have lead to huge increases in productivity.

A number of factors affect the productivity ratio in construction; labour force, processes, quality and external influences. The quantity and quality of resources utilized has a direct result on productivity. Utilizing the highest quality equipment, best supplies and most skilled workers will certainly produce better results in a shorter period of time than ...

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..., Accessed online 18 March 2014,

Costar Group, 15 January 2014, Workforce Factors Working Against Landlords in Lease Renewals, Accessed online 18 March 2014,

Shehataa, Mostafa E. and El-Gohary, Khaled M., 2011, Towards improving construction labor productivity and projects' performance, Alexandria Engineering Journal, Accessed online 18 March 2014,

Investopedia, 2014, Definition of Externality, Accessed online 18 March 2014,

American Planning Association, 2013, What is Planning, Accessed online 18 March 2014,

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