Land and Labour |

Note on Land and Labour

  • Note
  • Things to remember


Factors of production is an economic term that describes the inputs that are used in the productionof goods or services in order to make an economic profit. The factors of production include land, labor, capital and entreprise. In other words,factors of producion are theresourcesor inputsthat are used in the production process to produce output .i.e.finished goods and services.




In ordinary language, land means a surface on the earth i.e soil. But in economics, land means all the natural forces which are known as the free gift of nature. It means land includes all the natural resources of the earth such as forest, mountain, etc.


It is created by nature. The common characteristics of land are as follows:

  1. The gift of nature

It is given to (use) us free of cost by nature. It is not a man-made factor. The contraction and expansion of land are not possible but various kinds of utilization are possible.

  1. Passive factor

It is a passive factor of production i.e. it cannot do anything by itself. The man has to do some effort to get some returns from it.

  1. Immobile factor

The land is an immobile factor of production. It cannot be shifted from pne place to another i.e. it is always fixed in a certain place. It means that position of land cannot be changed.

  1. Different in variety

All the land found on the earth are not in same quantity. Some land is more fertile and some are less fertile. As a result of this different fertility, the cost of land is also different.

  1. Limited quantity

The land is found in quantity. It cannot increase and decrease. In another word, the supply of land is limited. But, man can improve the quanlity of land.

  1. Indestructive

The land is an indestructive factor because no one can destroy it. Sometimes natural calamities may change its location but cannot destroy.



In the ordinary sense, the term labour means the physical work of unskilled workers but in economics, labour means the physical and mental work with an economic return. It may be the work of a mother, doctor, lawyers. If a singer sang for a money, he/she becomes a labour. Hence,labour means the human effort towards earning rewards. Therefore,labour is all that physical and mental activities which produce goods and services.


  • Active factor

Labour is an active factor of production. Labour does not need the help of others to make him work. It brings change in production of the economy.

  • Mobile Factor

Labour is a mobile factor. A labour can move from one place to another in search of better opportunities. He/she can sell his/her service whenever he/she wants but it is mobile than capital because he/she is surrounded by social factors like family, society etc

  • Different in efficiency

All the workers are not equally capable of doing works. The service provided by labour are different. The efficiency or quality of labour can be improved through education, health, service and different types of training.

  • Labour cannot be stored

Labour is more important than other factors of production. It means if a worker do not work for a day or certain time then a labour time will be last forever. It can never be propounded or accumulated for next time. It means it cannot be stored.

  • Unseparated

Labour cannot be separated from labourer . But, a worker can sell his labour for wages. So, it is impossible to separate a labour from a worker.

  • Means as well as ends of producer

Labour is both means and ends of a producer. On one side, labour plays an important role in the production process and on the other side, labour is the consumer of the product.


In ancient time, a single person uses to make a final product by himself. But, later it was realized that the division of labour means the allocation of work among the worker according to their willingness, ability and training. The division of labour has two different forms i.e.single and complex.

1) Simple division of labour

When a particular type of work is allocated to particular person or groups according to caste, religion, etc. then, it is called the simple division of labour. A labour can get the whole job from the beginning to the end.

2) Complex division of labour:

Under the division of labour, a single job is divided into different and subparts .Each part of the job is taken by specialists and an individual does not get job from beginning to the end. In this modern age, this system has been widely accepted.

  • Increase production: The division of labour increases the production. The reason is that when labour performs a different part of work, his efficiency or specialization becomes high, as a result, production increases.

  • Invention possibility: When a worker continuously concentrates in some job, he becomes an expert and tries to find some new and improved method of production. Hence, an invention is possible under the division of labour.

  • Economical use of machine : In this new system, the workers are involved in only one part of a job to produce goods with the help of a machine. It means machine doesn’t remain ideal i.e economical use of the tools and machine.

  • Increase efficiency: Under the division of labour, a worker has to do his part of the job again and again. This improves the skill and efficiency of the workers. In the absence of division of labour, a man would be just jack of all but master of none.

  • The right man in the right place: Under the division of labour, right man is put or placed in right place. In the process, workers are allocated according to their ability, experience and desire. This encourages the workers to concentrate in particular part of the job.

  • The risk of unemployment: When a man is specialized in only one part of the work, he doesn’t have any idea of an organizationand he may become unfit for any other job. Hence, there is a risk of unemployment.

  • Loss of responsibility: Division of labour may lose the responsibility of labour because the labour is concentrated only on that part of work given to him. Therefore, everybody will become irresponsible in the entire work of the production.

  • Loss of self-dependency : Division of labour means interdependence of labour. To produce any goods and services, they must depend on with each other which promote the high dependency of all the workers.

  • Monotonous: A labour has to repeat the same job again and again. In the system of division of labour, this makes the worker monotonous which adversely affect the efficiency of the worker.

  • Fear of over production: Division of labour increases the production of goods and services. This increases the production which may exceed the market demand which brings fluctuation in an economy.


Efficiency means the productivity of labour. In other words, it indicates a working capacity of the worker.Efficiency and labour are a related term because measurement of efficiency is based on the comparison. Quality and quantity also help to measure the efficiency of labour. If a worker produces small quantity but a better production then he is more efficient than others who produce normal quality. There are some factors or determinants which influence the efficiency of labour.

In other words, worjers efficiency can be defined as time taken by a worker to complete a job compared with the standard time allowed for it

  • Wage level: Level of wage highly influence the efficiency of labour. If an entrepreneur provides high wage or salary, then worker performs more efficiently. If wage and other facilities are insufficient, then, he will show his negligence in work. Hence, it reduces the efficiency of labour.

  • Education and training: Education and training are the major factors which determine the efficiency of labour. It is believed that suitable climate must be provided to the employees for training which helps to increase the efficiency of labour and also increases desire, willingness and ability to work

  • Environment: The environment and climate of the working place also affect the efficiency of labour.It is believed that suitable climate is best for health which increases the efficiency of labour because it helps to increase desire and willingness. of employees to work.

  • Rewards and benefits : Reward and benefits providing system to the worker makes them more sincere on their duties because every national person is worried about future prospects,benefits and rewards. Therefore, to increase their worker's efficiency, entrepreneurs must provide promotion, bonus, rewards, etc.

(Karna, Khanal and Chaulagain)(Khanal, Khatiwada and Thapa)(Jha, Bhusal and Bista)


Jha, P.K., et al. Economics II. Kalimati, Kathmandu: Dreamland Publication, 2011.

Karna, Dr.Surendra Labh, Bhawani Prasad Khanal and Neelam Prasad Chaulagain. Economics. Kathmandu: Jupiter Publisher and Distributors Pvt. Ltd, 2070.

Khanal, Dr. Rajesh Keshar, et al. Economics II. Kathmandu: Januka Publication Pvt. Ltd., 2013.

  1. The land is important but passive factors of production. 
  2. The land is an immobile factor of production.
  3. The land is an indestructive factor because no one can destroy it.
  4. Labour is a mobile factor.
  5. Labour cannot be separated from labourer (work).

Very Short Questions



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Forum Time Replies Report

what are the features of capital

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Prabin Acharya

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