You can create paperformat with specific page_height and page width yo want.
for example:
<record id="paperformat_label" model="report.paperformat">
<field name="name">Label Paperformat</field>
<field name="default" eval="True" />
<field name="format">custom</field>
<field name="page_height">85</field>
<field name="page_width">175</field>
<field name="orientation">Portrait</field>
<field name="margin_top">5</field>
<field name="margin_bottom">5</field>
<field name="margin_left">5</field>
<field name="margin_right">5</field>
<field name="header_line" eval="False" />
<field name="header_spacing">5</field>
<field name="dpi">90</field>
</record>
after then give this paperformat where you want to change the label size in the report.
<field name="paperformat_id" ref="module_name.paperformat_label" />