Labor market: The arena where employers and employees interact. The labor market describes labor’s available supply and demand, where employers provide the demand and employees provide the supply.
Employment-to-population ratio: The number of employed people of working age divided by the total working-age population. If 60 million people are employed in a total population of 100 million working-age people, the ratio would be 60 percent.
Productivity: A measure of the efficiency of an individual, machine, factory, or any system converting inputs into useful outputs. For example, a factory worker’s productivity in making cell phones could be measured by how many cell phones she makes in an hour. The more she produces, the higher her productivity.
To learn more, watch “The Formula for Economic Growth.”
Does technology complement or substitute labor in production?
It depends. Improving technologies can increase the productivity of some occupations. For example, in the medical industry, online medical records and new imaging procedures have made doctors more productive. However, technology can also displace workers. For instance, automation has allowed some firms to produce more output with fewer workers.