OPC/U3 Topic 4 Labor Intensive
In simple words labour intensive technique is that which uses comparatively larger amount of labour and small doses of capital. It is that technique by which more of labour and less of capital is required for the process of production. However, it can be defined as one in which a large amount of labour is combined with a smaller amount of capital. According to Prof. Myint, “labour intensive methods of production are those that require a large quantity of labour with a given unit of capital.” With this method of production, it is possible to raise output by using the same amount of capital but greater amount of labour.
This technique fulfills two objectives of capital formation and skill. It raises agriculture production through the use of minor irrigation, better seeds, manure, implements and the introduction of short duration crops. Labour intensive technique has been illustrated with the help of diagram I. In this diagramme, isoquant Q shows the initial level of output which is being produced by using OL labour and OC amount of capital. With the adoption of new technology a higher level of output is represented by the isoquant Q1; can be produced by the same amount of capital i.e. OC. In this case, greater amount of labour is OL This shows that the technique is labour intensive.