Labor Economics in an Islamic Framework : Theory and Practice book cover
1st Edition

Labor Economics in an Islamic Framework
Theory and Practice

ISBN 9781032014357
Published December 31, 2021 by Routledge
264 Pages 29 B/W Illustrations

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Book Description

The labor market in Islam is governed by the Islamic laws of fairness, justice, and reward that is equivalent to the job done. Most of the literature in the field discusses the normative aspect of the labor market, whereas few attempts can be seen to address more positive aspects. There is a need for new theoretical and empirical models for the Islamic labor market, which should differ from established approaches.

This book provides a comprehensive overview of the nature, scope, and dimensions of the labor market in an Islamic context, from both theoretical and practical perspectives. It presents and discusses labor economics and then compares the similarities and differences between conventional and Islamic views of the labor market, explaining where they meet, and critically justifying why they differ, under the umbrella of Shari'ah. The book raises pertinent issues, which it analyzes from both standpoints and widens the discourse to include norms, morality, and related institutions such as social security and welfare. A unique feature of the book is that it examines labor economics practices among a specific group of countries, and studies the labor conditions within these countries, where the majority of the population follow the teachings of Islam in their daily lives. The book proposes practical strategies for the development of new models for the Islamic labor market which are compatible with the modern world.

The book will enable academics and practitioners of Islamic economics to make economic sense of Shari'ah compliance and human resource development.

Table of Contents

List of illustrations

List of tables

List of boxes

About the authors



Part I

Chapter 1

Introduction to Labor Economics in an

Islamic Framework

    1. Rationale
    2. Labor as a Factor of Production
    3. The Importance of Labor
    4. Labor Market in a Conventional Setting
    5. Why Labor Market in an Islamic Setting?
    6. Maqsad al Shari’ah (Objective of Islamic Jurisprudence)
    7. Chapter Organization

Chapter 2

Mainstream Labor Market Models: A Review

2-1 Labor Supply

2-2 Labor Demand

2-3 Labor Market Equilibrium

2-4 Compensating Wage Differentials

2-5 Human Capital

2-6 The Wage Structure

2-7 Labor Mobility

2-8 Labor Market Discrimination

2-9 Labor Unions

2-10 Incentive Pay

2-11 Unemployment

2-12 Austrian Labor Economics


Chapter 3

Contributions of Islamic Scholars on Labor Economics and

Some Empirical Evidence of Medieval Islam

3-1 Teachings of Qur’an and Sunnah

3-2 The First Phase (700-1400AD)

3-3 The Second Phase: The Foundations and Development – (1058 - 1446)

3-3-1 Abu Hamid Al-Ghazali (1058–1111)

3-3-2 Imam Ibn Taymiyyah (d. 1328 AD)

3-3-3 Ibn Qayyim (1292–1350)

3-3-4 Ibn Khaldun (d. 1404 AD)

3-4 The Third Phase: The Foundations and Development– (1446 - 1932)

3-4-1 Shah Waliullah (d. 1762 AD)

3-5 Division of Labor: Thoughts of Prominent Persian Muslim Scholars

3-6 Wages and Opinions of Muslim Jurists

3-7 Empirical Evidence of Labor Market in the Medieval Period of Islam

3-7-1 Child Labor Force

3-7-2 Wages

3-7-3 Female Labor Force during the Islamic Medieval Period

3-7-4 Human Capital


Chapter 4

Work in Islam

4-1 The Concept and Nature of Labor

4-2 The Importance of Labor

4-3 The Capacity and Care of Workers

4-4 Labor-Less Earnings

4-5 The Rights and Duties of Workers

4-6 Labor and Capital

4-7 The Relationship between Employer and Employee


Chapter 5

System of Industrial Relations in an Islamic Framework

5-1 Management and Nexus of Contract

5-2 Environment of Participation and Cooperation

5-3 Division of Labor

5-4 Management –Workers Relationship and Some Modern Hypotheses


Chapter 6

The Labor Market in an Islamic Setting:

Review and Prospects

6-1 An Overview of the Labor Market and its Mechanism in a Conventional Setting

6-1-1 Two Ways of Analyzing Labor Markets

6-2 The Labor Market and its Mechanism in an Islamic Framework

6-2-1 Cornerstones for the Mechanism of Labor Market in an Islamic Framework

6-2-1-1 Mechanism of the Labor Market

6-2-1-2 Supply of Labor

6-2-1-2-1 Gender, Child Labor and Work in an Islamic Society

6-2-1-3 Demand for Labor

6-2-1-3 -1 Demand for Labor and Human Capital

6-2-2 Wages

6-2-2-1 Wages and Norms of the Labor Market in an Islamic System

6-2-2-1-1 Flexibility of Wages

6-2-2-2 Economics of the Family

6-2-2-3 Reservation Wage

6-2-3 The Role of State

6-3 Research into the Labor Market in the Periphery of Islam: A Drought

6-4 Some Graphical Exposition


Chapter 7

Wages in an Islamic Economy

7-1 Status of Wages and Shari’ah Ruling

7-2 Determination of Wages and the Islamic Labor Market

7-3 Islamic Concept of Wages and Modern Theories: A Comparative Analysis


Part II

Chapter 8

An Overall View of the Muslim Countries

8-1 The State of Economy

8-2 Goods Market

8-2-1 Production

8-2-2 Growth

8-2-3 Saving and Investment Trends

8-3 Money Market

8-4 Labor Market

8-5 The Social Impediments


Chapter 9

The Current Status of Labor Market in Muslim Countries

9-1 The Structure of the Labor Market

9-1-1 The State of Unemployment

9-2 Labor Force Participation Rate

9-2-1 Aggregate Demand

9-2-2 Spending of Charitable Assets

9-2-3 Concept of Welfare State

9-3 Skilled Labor Force

9-4 Brain Drain

9-4-1 Brain Drain within the Member Countries

9-5 Cooperation among the Muslim Countries

9-5-1 Extended Market

9-6 Internal and External Shocks to the Labor Market


Chapter 10

State of Poverty and Labor Market

10-1 Introduction

10-2 State of Poverty in the Muslim Countries

10-3 Wage Structure, Prices of Cereals and Comparison with the Developed World

10-4 Transfer of Technology


Chapter 11

Labor and Social Security: Theory and Practice

11-1 Introduction

11-2 Modern Concept of Social Security

11-3 Islamic Concept of Social Security

11-3-1 Morality and Social Security

11-3-2 Non-Muslim Subjects

11-3-3 Umar ibn al-Khattab's Social Security System (634-644 AD)

11-4 Current Practice of Social Security in the Muslim Countries


Chapter 12


12-1 Research into the Labor Market in the Periphery of Islam: A Drought



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Toseef Azid is Professor of Economics at the College of Business and Economics, Qassim University, Saudi Arabia.

Umar Burki is Associate Professor at USN School of Business, University of South-Eastern Norway and Adjunct Associate Professor, Department of Economics and Administration, Oslo New University College, Oslo, Norway.

Muhammad Juniad Khawaja is Associate Professor of Economics, Director of M.Sc. Economics and Director of the College Strategic Planning Committee at the College of Business and Economics, Qassim University, Saudi Arabia.

Nasim Shah Shirazi is Professor at the College of Islamic Studies (CIS), Hamad bin Khalifa University, Doha, Qatar.

Muhammad Tahir is Assistant Professor of Economics at COMSATS University Islamabad, Pakistan.


"The goal of this volume is to provide thought-provoking discussion regarding the moral and ethical corners of the labor market under the guidance of divine law. This volume also reviewed the labor market's behavior during the early Islamic, medieval and current periods. It invites the researcher to start their research on the Islamic labor market's different dimensions and asks them to develop mathematical models based on the theoretical foundations, which provides a roadmap for further discussion and empirically tests them where data are available." — Professor Dr. Mohamed Aslam Mohamed Haneef, Department of Economics, International Islamic University Malaysia.