24 Supply of labour Flashcards
Supply of labour
Ability and willingness of households to work at different wage levels
Factors effecting supply of labour (wage)
Causes movement along curve - extension or contraction
Factors effecting supply of labour (wages in other industries)
Rational for a households to want to supply labour to industry offers the highest wages
- a change in wage in a different industry is likely to affect supply of labour
Factors effecting supply of labour (non-monetary benefits)
- Longer holidays, training, job security
- occupations with high levels of non-monetary benefits are likely to have a higher number of workers that are willing and able to offer services
Factors effecting supply of labour (qualifications or skills needed )
Some occupations require qualifications or skills that both everyone has
- the more qualifications needed the fewer people who an supply labour
- cost of qualifications can also be a factor
Factors effecting supply of labour (demographics)
Population structure
- number of people at working age
- number of retired people
- migration of workers
Factors effecting supply of labour
- wage
- wages in other industries
- non-monetary benefits
- qualifications or skills needed in the job
- demographics
Factors effecting wage elasticity
- availability of workers
- skills and qualifications
- nature of the job
- labour immobility
Factors effecting wage elasticity (availability of workers)
Affects response to a change in wage
- high unemployment a small change in wage leads to large change in quantity of labour
Factors effecting wage elasticity (skills and qualifications)
As wage increases, more workers might want to offer labour but lack of skills or qualifications msuy stop them from doing so
- more skills and qualifications more inelastic
Factors effecting wage elasticity (nature of jobs)
- person could never drawn to job even if wages are low
- some jobs may be undesirable even though they have high wages
Factors effecting wage elasticity (labour mobility)
- rational for worker to change occupation if wage is higher
- some professional workers may be unwilling to move into manual job or geographical areas even if wage is higher
Short run and long run supply of labour
Short run - inelastic - can’t swap jobs as they need skills or qualifications
Long run - elastic - people can train to swap to different jobs