IDEAS home Printed from
   My bibliography  Save this paper

Economic Opportunity Cost Of Labour: A Synthesis


  • Glenn Jenkins

    () (Queen's University, Kingston, On, Canada)


In this article the economic opportunity cost of labor has been estimated using the supply price approach under a wide variety of labor market conditions and types of job. This approach is shown to be equivalent to the marginal product of labor foregone approach, when the latter can be estimated accurately. The primary reliance of the supply price approach on the wage rates demanded under the labor conditions of the project greatly facilitates the estimation of this economic parameter for use in the economic valuation of projects. A methodology has been outlined in detail to account for several adjustments that may need to be made to this supply price to reflect special labor market characteristics and distortions. Most of these factors, such as income taxes and unemployment insurance compensation, are straightforward and easy to estimate. Other issues dealing with the quality of the jobs and the nature of the unemployment present require a more detailed examination of the labor market. Once these values have been determined, they are used to adjust the supply price to arrive at an estimate of the economic opportunity cost of labor for a particular skill on a particular project.

Suggested Citation

  • Glenn Jenkins, 1995. "Economic Opportunity Cost Of Labour: A Synthesis," Development Discussion Papers 1995-02, JDI Executive Programs.
  • Handle: RePEc:qed:dpaper:117

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Vincent, Ng’eno & Lagat, B.K. & Korir, M.K. & Ngeno, E.K. & Kipsat, Mary J., 2010. "Resource Use Efficiency in Poultry Production in Bureti District, Kenya," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 97094, African Association of Agricultural Economists (AAAE).

    More about this item


    labor; economic opportunity costs; supply- price approach;

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qed:dpaper:117. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bahman Kashi). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.