3.5.2 - Supply Of Labour Flashcards
What Are The Factors Influencing The Supply Of Labour?
(8 Points)
~ Training period.
~ Wage in other occupations.
~ Changes in migration policy.
~ Income tax level.
~ Working conditions.
~ Trade union power.
~ Level of welfare benefits.
~ Social trends.
What Could Be Some Points Made For ‘Training Period’?
Long training periods act as a barrier to entry and exclude many households from offering labour in certain markets.
What Could Be Some Points Made For ‘Wages In Other Occupations’?
Comparative wage rates in substitute labour markets could deter labour from lower paying jobs.
What Are Migration Policies?
Policies that increase the net migration rate also increase the supply of labour to certain industries.
What Could Be Some Points Made For ‘Income Tax Levels’?
(2 Points)
~ At a certain level, income taxes become a disincentive to households offering the labour.
~ The assumption is that as income tax increases, labour supply decreases and vice versa.
What Could Be Some Points Made For ‘Working Conditions’?
Working conditions and non-pay benefits can act as a strong incentive in certain industries.
What Could Be Some Points Made For ‘Trade Union Power’?
They can increase the supply of labour to certain industries as workers consider the benefits of belonging to a union.
What Could Be Some Points Made For ‘Level Of Welfare Benefits’?
The higher the level of welfare benefits, the lower the incentive for low-skilled labour to offer their labour and vice versa.
What Could Be Some Points Made For ‘Social Trends’?
They include any major changes within society and can influence the supply of labour to certain industries.
How Does Market Failure Occur In The Labour Market & What Is It Caused By?
(2 Points)
~ Occurs when workers are unable to easily move between jobs.
~ Caused by the geographical immobility of labour and by the occupational mobility of labour.
What Is The Geographical Immobility Of Labour?
When workers find it difficult to move from one geographical area to another in order to secure employment.
What Are Some Barriers To Mobility?
(3 Points)
~ Family ties.
~ Lack of information about possible jobs.
~ Challenges in securing and affording accommodation in an unknown location.
