EconomicsICSE Class 10 · Chapter 2

Labour ICSE Class 10 Economics: Division and Efficiency of Labour

Updated 14 October 2026 · Fact-checked

In economics, labour is any physical or mental work done for a monetary reward. ICSE Class 10 tests its meaning and characteristics, division of labour (meaning, types and advantages), efficiency of labour (meaning) and the reasons for the low efficiency of Indian labour compared with workers in developed countries.

What Labour is about

Labour is the human factor of production. Unlike land and capital, labour cannot be separated from the person who supplies it, which gives it special features: it is perishable, workers have feelings and needs, and they usually have weak bargaining power.

The syllabus covers: meaning and characteristics of labour; division of labour, its meaning, types (simple, complex and territorial) and advantages; and efficiency of labour, its meaning and the reasons why Indian labour is less efficient than workers in developed countries.

Board questions include situation MCQs ('if a labourer does not work for a day, his day's work is lost forever'), picture-based identification of a type of division of labour, and a 5-mark question on reasons for low efficiency. CISCE examiners' comments show students confusing characteristics of labour with efficiency of labour, overlooking 'not' in MCQs, and misreading pictures of division of labour.

Weightage: CISCE publishes no chapter weightage. The paper has a compulsory Section A (40 marks: 16 one-mark MCQs and three 8-mark questions of four 2-mark parts) and Section B, where you answer any four of six 10-mark questions (two 5-mark parts each).Source: CISCE ICSE Economics (641) specimen paper structure, 2025, retained for 2027 by the CISCE circular of 9 October 2026

Key concepts

Meaning of labour

Labour means any physical or mental effort undertaken by a human being with the motive of earning an income (monetary reward). A farm worker, a factory worker, a teacher, a doctor and a software engineer all supply labour.

Work done for pleasure, love or service without a reward is not labour in economics: a mother cooking for her family or a person singing for fun is not 'labour', but a cook in a hotel or a professional singer is.

Worked example

(2 marks) Explain labour as a factor of production. Is a parent teaching their own child labour? Why?

Try it first, then show the solutionSolution

Labour is any physical or mental effort done with the motive of earning a monetary reward - 1 mark.
A parent teaching their own child is not labour, as it is done out of love, not for income - 1 mark.

Answer: Labour is any human effort, physical or mental, made in return for a monetary reward. A parent teaching their own child does it out of love, without payment, so it is not labour in economics.

Characteristics of labour

1. Labour is perishable: it cannot be stored. If a worker does not work for a day, that day's labour is lost forever.
2. Labour is inseparable from the labourer: the worker must be present where the work is done; he sells his services, not himself.
3. Labour is a human factor: workers have feelings, needs and dignity, so they cannot be treated like machines; working conditions matter.
4. Labour is an active factor: land and capital are passive; labour sets them to work.
5. Weak bargaining power: most workers are poor, have no reserves and cannot hold back their labour, so employers have the upper hand in fixing wages.
6. Supply of labour cannot be changed quickly: it depends on population and training, which change slowly.
7. Labour is mobile, though less so than capital: workers can move between places and jobs, but family ties, language and cost limit movement.
8. Labour differs in efficiency: workers vary in skill, training and health.
9. Labour is both a means and an end of production: workers produce goods and also consume them.

Worked example

(1 mark) 'If a labourer does not work for a day, his one day's work is lost forever.' Which characteristic of labour does this show?

Try it first, then show the solutionSolution

Labour cannot be stored for future use.
This is the perishable nature of labour (not efficiency).

Answer: Labour is perishable.

Division of labour and its types

Division of labour means dividing the work of production into separate parts or processes and assigning each part to a different worker or group of workers, who specialise in it.

Types:
1. Simple division of labour (occupational): society is divided into different occupations, each person doing a complete job in his trade, for example a tailor, a carpenter, a teacher or a farmer.
2. Complex division of labour (process-based): the making of one product is split into many processes and sub-processes, each done by a different worker, as on an assembly line making cars, shoes or garments. No single worker makes the whole product.
3. Territorial or geographical division of labour (regional specialisation): particular places specialise in producing particular goods because of natural or other advantages, for example cotton textiles in Mumbai and Ahmedabad, jute goods around Kolkata, carpets in Bhadohi and brassware in Moradabad.

Worked example

(2 marks) A picture shows a garment factory where one worker cuts cloth, another stitches sleeves, a third attaches buttons and a fourth irons. Identify and explain the type of division of labour.

Try it first, then show the solutionSolution

It is complex (process-based) division of labour - 1 mark.
Making one product (a shirt) is split into several processes, each done by a different worker who specialises in it - 1 mark.

Answer: This is complex division of labour: the production of a single shirt is divided into separate processes (cutting, stitching, buttoning, ironing), each performed by a different specialised worker.

Advantages of division of labour

1. Increase in skill and efficiency: doing the same task repeatedly makes a worker expert at it ('practice makes perfect').
2. Saving of time: workers do not waste time moving from one job to another or changing tools.
3. Use of machinery: when work is broken into simple, repetitive tasks, machines can be used for them.
4. Increase in production and lower cost: specialisation and machines raise output and reduce the cost per unit.
5. Right person for the right job: each worker can be given the task that suits his ability.
6. Encourages inventions: constant attention to one task leads workers to find better methods and tools.
7. Shorter training: a worker needs to learn only one task, so training is quicker and cheaper.
8. Employment for more people, including those with limited skills or some disabilities, since simple tasks can be learned easily.

(Its disadvantages include monotony, loss of the joy of making a whole product, too much dependence on others, and possible unemployment when machines replace workers. These are useful for 'which is NOT an advantage' questions.)

Worked example

(5 marks) Explain any five advantages of division of labour.

Try it first, then show the solutionSolution

Increases skill and efficiency through repetition - 1 mark.
Saves time spent switching tasks and tools - 1 mark.
Makes the use of machinery possible - 1 mark.
Raises production and lowers cost per unit - 1 mark.
Allows the right worker for the right job and shortens training (or encourages inventions) - 1 mark.

Answer: (1) Workers become more skilled by repeating one task. (2) Time is saved because workers do not shift between jobs. (3) Simple tasks can be done by machines. (4) Output rises and cost per unit falls. (5) Each worker is placed where his ability fits best, and training takes less time.

Efficiency of labour

Efficiency of labour means the productive capacity of a labourer: his ability to produce more goods, or better goods, in a given time with given resources. An efficient worker produces more and better output in the same time.

By contrast, division of labour shows the specialisation of labour: how work is divided among workers. (A board MCQ asked: efficiency of labour shows productive capacity, whereas division of labour shows specialisation of labour.)

Factors that affect efficiency: health and nutrition; education and technical training; wages and incentives; working conditions (light, ventilation, safety); hours of work and rest; climate; personal qualities such as honesty and discipline; the quality of machines and technology used; and good organisation and management.

Worked example

(1 mark) Efficiency of labour shows the productive capacity of a labourer, whereas division of labour shows ________ of labour.

Try it first, then show the solutionSolution

Division of labour divides work into specialised tasks.
So it shows specialisation of labour.

Answer: Specialisation.

Reasons for low efficiency of Indian labour

Compared with workers in developed countries, Indian workers are on average less efficient because of:
1. Poor health and nutrition: low incomes mean an inadequate diet, and poor medical care leads to illness.
2. Illiteracy and lack of technical training: many workers have little education or vocational skill.
3. Low wages and lack of incentives: low pay reduces motivation and the ability to live well.
4. Poor working conditions: crowded, badly lit and unsafe workplaces and long hours tire workers.
5. Hot and humid climate in much of the country, which reduces stamina.
6. Outdated machinery and technology: workers using old tools produce less than those using modern machines.
7. Lack of job security and welfare measures (housing, insurance, pensions).
8. Social factors: rigid customs, lack of ambition and low mobility of labour.
9. Inefficient organisation and management.

Worked example

(5 marks) What factors contribute to the lower efficiency of labour in India as compared to developed nations?

Try it first, then show the solutionSolution

Poor health and nutrition due to low incomes - 1 mark.
Illiteracy and lack of technical training - 1 mark.
Low wages and few incentives - 1 mark.
Poor working conditions and the hot climate - 1 mark.
Outdated machinery and technology, and poor management - 1 mark.

Answer: (1) Inadequate diet and medical care lead to poor health. (2) Many workers lack education and technical skills. (3) Low wages and few incentives reduce motivation. (4) Poor working conditions and a hot climate reduce stamina. (5) Old machinery and weak management limit output per worker.

Labour in real life

Each concept, met in an everyday situation. Read the situation, answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Perishability of labour

Suppose a daily-wage carpenter falls ill for three days during the busy wedding season and cannot work.

Which characteristic of labour explains his loss, and why can't he make up for it later?

Try it first, then show the solutionSolution

Labour cannot be stored; a day not worked is lost forever.
He cannot 'save' those three days of labour to sell later.
So the income of those days is lost, unlike a shopkeeper who can sell stored goods later.

Answer: Labour is perishable: the work he could have done on those days cannot be stored and sold later, so that income is lost for good.

Memory hook: Labour lost today cannot be sold tomorrow.

Territorial division of labour

Imagine you are shopping for a carpet and are told the best ones come from Bhadohi, while your aunt says the finest brass lamps come from Moradabad.

Which type of division of labour is shown, and why does it develop?

Try it first, then show the solutionSolution

Particular places specialise in particular products.
This is territorial (geographical) division of labour.
It develops because of local skills passed down, raw materials, tradition and markets.

Answer: Territorial division of labour: towns like Bhadohi (carpets) and Moradabad (brassware) specialise because of inherited skills, local raw materials and established markets.

Memory hook: Places specialise too.

Efficiency of labour

Suppose two textile factories pay the same wages, but one gives workers clean canteens, regular health check-ups, training and modern looms. Its workers produce 40 per cent more cloth per hour.

Explain why its workers are more efficient.

Try it first, then show the solutionSolution

Good health and nutrition (canteen, check-ups) increase stamina.
Training raises skill.
Modern looms increase output per worker.

Answer: Its workers are healthier, better trained and use modern machines, all of which raise efficiency of labour, so they produce more per hour.

Memory hook: Healthy, trained and well equipped workers produce more.

Topics in this chapter

Labour: key facts

Labour: Physical or mental effort for a monetary reward; Reward: wages.
Types of division of labour: Simple (occupational), complex (process), territorial (regional)
Efficiency of labour: Productive capacity of a labourer; Division of labour = specialisation.
Key characteristics: Perishable, inseparable, human, active, weak bargaining power, slow supply change, mobile, varies in efficiency

How the board asks Labour

The question patterns to expect, and the method that works for each.

Question type	How it is asked	Method
Situation MCQ (Section A)	A day's work lost forever; which is NOT an advantage of division of labour.	Perishability for lost work; watch for NOT; monotony is a disadvantage.
Picture-based (2 marks)	Identify the type of division of labour in pictures.	Different trades = simple; one product in steps = complex; regions = territorial.
Explain any five (5 marks)	Advantages of division of labour; reasons for low efficiency of Indian labour.	Name and explain each point in a sentence.

Tricks to remember Labour

Short memory aids. Say each one aloud once, then use it on a question the same day.

PIHAWS for characteristics
Perishable, Inseparable, Human, Active, Weak bargaining, Slow supply change.
Use it when: Characteristics.
S-C-T types
Simple (trades), Complex (processes), Territorial (places).
Use it when: Types of division of labour.
Low efficiency: HE-WWC-TM
Health, Education, Wages, Working conditions, Climate, Technology, Management.
Use it when: Reasons for low efficiency.

Labour: board-level solved questions

Ordered from board level to HOTS. Cover the solution, write your own, then compare step by step.

Example 1: Not an advantage · 1 mark · MCQBoard level

Which of the following is NOT an advantage of division of labour?
(a) Saving of time
(b) Increase in skill
(c) Monotony of work
(d) Use of machinery

Try it first, then show the solutionSolution

Saving of time, increase in skill and use of machinery are advantages.
Monotony is a disadvantage.

Answer: (c) Monotony of work.

Example 2: Perishability · 1 mark · MCQBoard level

If a labourer does not work for a day, his one day's work will be lost forever. It implies that labour is:
(a) mobile
(b) perishable
(c) efficient
(d) passive

Try it first, then show the solutionSolution

Labour cannot be stored for later use.

Answer: (b) perishable.

Example 3: Assertion and reason: bargaining power · 1 mark · Assertion-reasonHarder board level

Assertion (A): Labour has weak bargaining power.
Reason (R): Labour is perishable and most workers cannot afford to stay without work.
(a) Both A and R are true and R explains A
(b) Both A and R are true but R does not explain A
(c) A is true but R is false
(d) A is false but R is true

Try it first, then show the solutionSolution

Workers usually have little power to demand higher wages: A is true.
Because labour cannot be stored and poor workers need daily income, they cannot hold back their labour: R is true and explains A.

Answer: (a) Both A and R are true and R explains A.

Example 4: Simple versus complex · 2 marks · Short answerHarder board level

Distinguish between simple and complex division of labour with an example each.

Try it first, then show the solutionSolution

Simple: people follow different occupations, each doing a complete job, e.g. a tailor or a carpenter.
Complex: production of one good is split into processes done by different workers, e.g. a car assembly line.

Answer: In simple division of labour, each person follows a different occupation and does the whole job, like a tailor. In complex division of labour, making one product is split into many processes done by different workers, as on a car assembly line.

Example 5: Advantages · 5 marks · Long answerBoard level

Explain any five advantages of division of labour.

Try it first, then show the solutionSolution

Skill and efficiency rise through repetition.
Time is saved.
Machines can be used.
Production rises and cost falls.
Right person for the right job; short training; more inventions.

Answer: (1) Repetition makes workers skilled. (2) No time is lost moving between tasks. (3) Simple tasks allow the use of machines. (4) Output rises and unit cost falls. (5) Workers are placed according to ability and need less training.

Example 6: Low efficiency in India · 5 marks · Long answerHarder board level

Explain any five reasons for the low efficiency of Indian labour.

Try it first, then show the solutionSolution

Poor health and nutrition.
Illiteracy and lack of technical training.
Low wages and lack of incentives.
Poor working conditions and hot climate.
Outdated technology and inefficient management.

Answer: (1) Poor diet and health care reduce stamina. (2) Little education or technical training limits skill. (3) Low wages and no incentives reduce motivation. (4) Poor working conditions and a hot, humid climate tire workers. (5) Old machines and weak management reduce output per worker.

Example 7: Evaluate division of labour · 5 marks · Long answerHOTS / competency

'Division of labour benefits the producer more than the worker.' Discuss with two points each way.

Try it first, then show the solutionSolution

Producer gains: higher output and lower cost per unit; use of machines.
Producer gains: easier training and replacement of workers.
Worker loses: monotony and loss of craftsmanship; dependence on others for the whole product.
Worker loses: risk of unemployment when machines replace simple tasks; but workers can gain skill and easier entry to jobs.

Answer: Producers gain from higher output, lower costs, mechanisation and quick training of replaceable workers. Workers may suffer monotony, loss of craftsmanship, dependence and unemployment when machines take over simple tasks, though they gain skill in one task and find it easier to enter jobs. On balance the statement is largely true.

Case-study practice (Section B style)

Read the situation, then answer every part. In the board paper this is a 10-mark question split into 2 + 3 + 5 marks.

The shoe factory

Imagine a shoe factory in Agra. One group cuts leather, another stitches uppers, a third fixes soles and a fourth polishes and packs. Workers earn low wages, work long hours in poorly ventilated sheds, and many have never been trained. Agra is known across India for its shoes.

(i) · 2 marks
Identify two types of division of labour in the passage and explain each.
Answer
Answer: Complex division of labour: making a shoe is split into processes (cutting, stitching, soling, polishing) done by different workers. Territorial division of labour: Agra specialises in shoe-making.
1 mark each.
(ii) · 3 marks
State three advantages the factory gains from dividing work this way.
Answer
Answer: (1) Workers become skilled in one task. (2) Time is saved and output increases. (3) Machines can be used for simple tasks, lowering cost.
1 mark each.
(iii) · 5 marks
Give five reasons from the passage and your knowledge why these workers may have low efficiency, and suggest one remedy.
Answer
Answer: Reasons: low wages, long hours, poor ventilation (working conditions), lack of training, and likely poor health and outdated tools. Remedy: provide training and better working conditions with fair wages.
4 marks for reasons (any four), 1 for remedy.

Where the marks are

How a typical answer is split into step marks. Show every step: a right final answer alone rarely earns full marks.

Identify and explain the type of division of labour in a picture. (2 marks) (2 marks)

Step	Marks
Correct type named.	1
Explanation linked to the picture.	1

Five reasons for low efficiency of Indian labour. (5 marks) (5 marks)

Step	Marks
Health and nutrition.	1
Education and training.	1
Wages and incentives.	1
Working conditions / climate.	1
Technology / management.	1

Where students lose marks in Labour

The slips examiners see most often, and what to write instead.

Mistake: Confusing characteristics of labour with efficiency
CISCE examiners' comments, 2024: candidates confused efficiency of labour with characteristics of labour as a factor of production.
Do this: A day's work lost = perishability (a characteristic), not efficiency.
Usually costs: The full mark.
Mistake: Overlooking 'not'
CISCE examiners' comments, 2024: candidates overlooked the word 'not' in a division of labour MCQ.
Do this: Circle negative words.
Usually costs: The full mark.
Mistake: Misreading pictures of division of labour
CISCE examiners' comments, 2025: candidates misinterpreted the visual cues and could not identify the type.
Do this: Ask: different trades, steps of one product, or different places?
Usually costs: 2 marks.
Mistake: Defining labour without the reward motive
CISCE examiners' comments, 2024 (in the entrepreneur question that also asked for labour): candidates omitted the motive of earning a reward or income in the definition of labour.
Do this: Always include 'for a monetary reward'.
Usually costs: 1 mark.

Practice questions on Labour

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
Which of these is labour in economics?
(a) A mother cooking for her family
(b) A boy playing cricket for fun
(c) A cook working in a restaurant
(d) A grandfather telling stories to grandchildren
Hint
Monetary reward.
Answer
(c) A cook working in a restaurant.
Q2 · 1 mark · MCQBoard level
Carpets of Bhadohi and brassware of Moradabad are examples of:
(a) simple division of labour
(b) complex division of labour
(c) territorial division of labour
(d) efficiency of labour
Hint
Places.
Answer
(c) territorial division of labour.
Q3 · 2 marks · Very short answerBoard level
Why is labour called an active factor of production?
Hint
Compare with land.
Answer
Because labour sets the other factors to work: land and capital are passive and produce nothing unless labour operates them.
Q4 · 2 marks · Very short answerHarder board level
'Labour is inseparable from the labourer.' Explain.
Hint
Must be present.
Answer
A worker cannot send his labour somewhere without going himself; he must be present where the work is done. He sells his services, but he cannot separate them from his person.
Q5 · 2 marks · Very short answerBoard level
Define efficiency of labour and name two factors that affect it.
Hint
Productive capacity.
Answer
Efficiency of labour is the productive capacity of a worker, the ability to produce more or better goods in a given time. It depends on factors such as health and training (also wages, working conditions, technology).
Q6 · 2 marks · Very short answerHarder board level
Give two disadvantages of division of labour.
Hint
Boredom and dependence.
Answer
(1) Repeating one task becomes monotonous and kills creativity. (2) Workers depend on others and may become unemployed when machines replace their simple tasks.
Q7 · 5 marks · Long answerHarder board level
Explain any five characteristics of labour.
Hint
PIHAWS.
Answer
(1) Perishable: cannot be stored. (2) Inseparable from the labourer. (3) Human factor with feelings and needs. (4) Active factor that sets land and capital to work. (5) Weak bargaining power because workers cannot hold back labour.
Q8 · 5 marks · Long answerHOTS / competency
How can the efficiency of Indian labour be raised? Suggest five measures.
Hint
Reverse the causes.
Answer
(1) Better nutrition and health services. (2) Education and vocational training. (3) Fair wages and incentives linked to output. (4) Better working conditions and reasonable hours. (5) Modern machinery, technology and efficient management, with job security and welfare measures.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.What is the reward of labour?Show answer
Wages.
2.Name the three types of division of labour.Show answer
Simple, complex and territorial.
3.What does efficiency of labour mean?Show answer
The productive capacity of a labourer.
4.Why does labour have weak bargaining power?Show answer
It is perishable and workers cannot afford to stay without work.
5.Give one reason for low efficiency of Indian labour.Show answer
Poor health and nutrition (also illiteracy, low wages).

Best order to study it

Meaning of labour with the reward motive.
Characteristics of labour.
Division of labour: meaning, types with examples, advantages (and disadvantages).
Efficiency of labour: meaning and factors.
Reasons for low efficiency of Indian labour.

Quick revision checklist

The night before the exam: can you do each of these without looking?

Labour: physical or mental effort for a monetary reward.
Characteristics: perishable, inseparable, human, active, weak bargaining, slow supply change, mobile, varies.
Division of labour: simple (trades), complex (processes), territorial (places).
Advantages: skill, time, machines, output, right job, short training, inventions.
Efficiency: productive capacity.
Low Indian efficiency: health, education, wages, conditions, climate, technology, management.

Labour: frequently asked questions

Is a housewife's work labour?

Not in the economic sense, because it is not done for a monetary reward, though it is very valuable. If the same work is done by a paid domestic worker, it is labour.

What is the difference between efficiency of labour and division of labour?

Efficiency is a worker's productive capacity. Division of labour is the splitting of work into specialised tasks; it shows specialisation and can raise efficiency.

Do I need disadvantages of division of labour?

The syllabus asks for advantages, but knowing a few disadvantages helps with 'which is NOT an advantage' questions.

Based on: CISCE ICSE 2027 Economics syllabus; CISCE ICSE 2025 Specimen Question Paper and Marking Scheme, Economics (641)