Factors affecting the size of a labor force include population, income, educational attainment, home ownership, number of industries and government policies. Economic Online reveals that a 1 percent growth in state population causes a 0.74 percent growth in the size of the labor force. Additionally, an increase in minimum wage causes an increase in the size of a labor force.
According to Economic Online, home ownership has many benefits to the society, but it reduces employee mobility, decreasing the size of a labor force. An increase in the wage rate reduces the demand for labor, reducing the size of a labor force. On the other hand, high productivity increases the demand for labor and the size of a labor force. The supply of labor also affects the size of a labor force. Economic Online adds that immigration increases the size of a labor force while migration reduces it. Preference for work also affects the size of a labor force because the benefits of working motivate people to seek employment. Economic Online notes that trade unions prevent a decrease in the size of a labor force by protecting the rights of workers. According to InContext, the cost of living has no impact on the size of a labor force. Wikipedia reveals that a labor force includes the unemployed because of their potential for employment within formal and informal sectors.