3.5 - Labour Markets Flashcards
What is derived demand?
When demand for a good that results in demand for a factor of production
(e.g. demand for coffee leads to demand for baristas)
What are the 6 factors influencing demand for labour?
- Demand for the product (derived)
- Regulation
- Technology
- Wages in other countries
- Wage rates
- prices of other factors of production
(DR TWWP)
What is price elasticity of demand for labour?
Responsiveness of the quantity of labour demanded to the wage rate
What are the 4 factors affecting PED of labour?
- Direct correlation to price elasticity of demand for the product
- Proportion of wages to the total cost of production
- Substitutes
- Time
What are the 7 factors influencing supply of labour?
- Wages
- Population and distribution of age
- Non-monetary benefits
- Education/ training
- Trade unions and barriers to entry
- Wages and conditions of other jobs
- Legislation
What is occupational immobility?
Workers find it hard to move to another job due to lack of transferable skills
What is geographical immobility?
Workers find it hard to move between regions due to costs, family etc…
What is elasticity of supply for labour?
Responsiveness of supply of labour to change in wage rates
What is a bilateral monopoly?
When there is both a monopoly and monopsony in the labour market
What are the 7 issues in a labour market?
- Skill shortages
- Young Workers
- Retirement
- Wage inequality
- Zero-hour Contracts
- The ‘gig economy’
- Migration
What is national minimum wage?
Minimum hourly rate of pay and employer can pay its workers
What are the 5 ways the government can improve geographical mobility of labour?
- Increase Supply of houses
- Improve transport links
- National Advertising
- Introduce subsidies (e.g. for houses in areas of labour shortages)
- Move public Agencies out of London
What are 4 ways the government can improve occupational mobility of labour?
- Increase vocational training
- Encourage further study (e.g. university)
- Encourage greater spending on training within work
- Helping improve interview skills