5.2 Supply of Labour Flashcards
1
Q
What is supply of labour?
A
The number of hours that people are willing and able to work at a given wage rate
2
Q
Factors affecting labour supply?
A
- Wage Rate
- Extra Pay
- Barriers to entry
- Occupational mobility
- Job Risk
- Net Migration
3
Q
What is elasticity of labour supply?
A
Responsiveness of quantity of labour supplied to a wage change (WES)
4
Q
Factors affecting WES?
A
- Qualifications
- Vocational nature
- Time period
- Occupational mobility
- Geographical mobility
5
Q
Examples of labour market failure?
A
1) Geographical immobility
2) Occupational immobility
3) Discrimination
4) Monopsony power
6
Q
Causes of geographical immobility?
A
- Housing costs
- Migration controls
- Family ties
7
Q
Causes of occupational immobility?
A
- Skills gap
- Experience gaps
- Education gaps
8
Q
Effect of monopsony power?
A
Wage-setting power = lower wages
9
Q
Disincentives in the labour market?
A
- Poverty Trap (work adds taxes and less welfare)
- Unemployment Trap (better benefits)
