Labor Economics
All 10 Labor Economics terms in the AP Economics glossary — each with a clear, exam-accurate definition. Tap any term for the full explanation, formula, and related interactive graph.
A minimum wage is a legal price floor on wages, the lowest amount employers may legally pay workers.
A labor union is an organized group of workers that bargains collectively with employers over wages, benefits, and conditions.
Collective bargaining is the process where a union negotiates wages and working conditions with an employer on behalf of all workers.
The gig economy is a labor market based on short-term, flexible, independent work rather than permanent jobs.
An efficiency wage is a wage set above the market level to boost worker productivity, loyalty, and retention.
Unemployment insurance is a government program that pays temporary benefits to workers who lose their jobs.
A living wage is the income a worker needs to afford basic necessities like housing, food, and healthcare in their area.
A compensating differential is the extra pay needed to attract workers to undesirable, dangerous, or unpleasant jobs.
Labor mobility is the ease with which workers can move between jobs, occupations, or geographic regions.
The backward-bending labor supply curve shows hours worked rising with wages at first, then falling once the income effect of higher wages outweighs the substitution effect.