Question

What is the role of the flexibility of labor markets in promoting economic growth and efficiency? Provide an example of how inflexibility in Japan can hinder growth.

Answer 1

1 of I abor allows co as 9 and can mutinational Labor marker Flexibility is an important part the market. It companies to make certain decisons about changing their labor force response to fluctuations in the market to help boost production : Flexible labor markets help keep costs down for firms. e.g. firms get rid of surplus workers. This may help prevent the firm go bankrupt & profect jobs in the long run. Arguably with globalisation it is increasingly important for firms to remain within global economy with lower costs, there could be in output and exports. There could be lower of natural unemployment & may be countries with to attracted Flexible labor markets, creating jobs Ar competitive an increase labour rate lower inflation. invest in more

Labor market inflexibility in Japan detrimental impacts has on many business. Business have had not choice but to cut operationay hours. Businesses have had refuse orders because of the lack of roof manpower to complete them. Overall mana- gement of the business has suffered. The cause of the labor market inflexibility is the ageing population & the decreased na mber of young people in the country. These has red hinder the countries factors growth.