THE LABOR FORCE AND ITS COMPOSITION
Like many words in ordinary speech that are taken over by social scientists for specific concepts, the term "labor" has many meanings. To the economist, labor means the service rendered by individuals in the production of goods and services; labor--like capital, land and the organizing and risk-taking activities of the entrepreneur--is a factor of production.
This meaning is often modified, however, to include only those labor services rendered in a market for a price. This limitation is justified on the grounds that our economy is primarily a market economy and that society is not concerned with labor services to produce goods or services for personal or family consumption, such as the housewife's labor in preparing meals, the son's chores, and the father's do-it-yourself activities. Although we will normally follow the procedure of excluding this type of labor from consideration, we will see that it cannot be wholly neglected in analyzing certain types of situations, such as those relating to the amount of labor supplied.
A second limitation considers only the labor of those who work for others, and not the labor of the self-employed. The employee typically receives a wage or salary in payment for services performed in accordance