Labor Intensive

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Labor Intensive

Describing an industry or sector in which it is difficult to produce a good or service without a large amount of labor. Labor intensive industries require either a large number of employees or a large number of hours worked by employees, or both, in order to be successful. Labor intensity may be quantified by taking a ratio of the cost of labor (i.e. wages and salaries) as a proportion of the total capital cost of producing the good or service. The higher the ratio, the higher the labor intensity. Labor intensive industries may control costs in bad economies by laying off workers. Examples of labor intensive industries include agriculture, mining, and hospitality.
References in periodicals archive ?
In order to get a first idea of the role of technology and scale effects, figure 2 plots the change in intra-industry and inter-industry offshoring against the change in labour-intensity and gross output.
The negative correlation between the change in intra-industry offshoring and the change in labour-intensity is weaker than that between inter-industry offshoring and labour intensity (-0.
Offshoring within the same industry (intra-industry offshoring) reduces the labour-intensity of production, but does not affect overall industry employment.
More specifically, our results indicate that while offshoring within the same industry (intra-industry offshoring) reduces the labour-intensity of production, it does not affect overall industry employment.
To the extent that imports from the same industry are more likely to replace activities previously conducted in the same domestic industry than imports from other industries, one would expect intra-industry offshoring to have a more pronounced negative effect on labour-intensity than inter-industry offshoring.
The report says that these concerns are especially critical for a sector known for its combination of high labour-intensity and above-average labour turnover.