6.2 Influences Upon The Supply Of Labour To Different Markets

Question 1

What is the supply of labour?

Answer 1

• The supply of labour is calculated by the number of workers willing and able to work at the current wage rate, multiplied by the number of hours they can work.
• It is influenced by monetary and non-monetary considerations.
• Non-monetary considerations include how satisfied workers are with their job and their working conditions.

Question 2

What factors influence the supply of labour to a particular occupation?

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Answer 2

• the wage rate
• demographics of the population
• migration
• advantages of work
• leisure time
• trade unions
• taxes and benefits
• training

Question 3

Factors affecting the supply of labour- wage rate

Answer 3

• The upward sloping supply curve shows the proportional relationship
  between how much the wage rate and the number of workers willing and
  able to work.

Question 4

Factors affecting the supply of labour-demographics of the population

Answer 4

• The more people there who are able and willing to work, the higher the supply of labour.
• This changes with retirement and school leaving ages, the
  number of university students and immigration.
• It can be illustrated with a shift to the right of the supply curve.

Question 5

Factors affecting the supply of labour-migration

Answer 5

• Migrants are usually of working age, so the supply of labour at all wage rates
  tends to increase.
• Migration particularly affects the supply of labour at the lower wage rates, because migrants are usually from economies with average wages lower than the UK minimum wage.

Question 6

Factors affecting the supply of labour-advantages of work

Answer 6

• This can influence how much people prefer to work, and is linked to non-
  monetary advantages.
• If the cost of working is lower, so families can afford childcare, people are more likely to work.
• If the benefits of working are high, such as holiday entitlements and the potential to be promoted, the supply of labour is likely to increase.
• It also considers job satisfaction and how good the working conditions are.

Question 7

Factors affecting the supply of labour-leisure time

Answer 7

• Leisure is a substitute for work, which is why part-time work and early
  retirements are attractive options for some people.
• People have to choose whether to spend their time on work or leisure.
• This is influence by age, the amount of taxes paid, how many dependents the
  worker has and income from not working.

Question 8

Factors affecting the supply of labour- trade unions

Answer 8

• These could attract workers to the labour market, because they know their
  employment rights will be defended.
• However, the limits on workers, such as limiting their ability to strike, might cause some people to withdraw from the labour market

Question 9

Factors affecting the supply of labour-taxes and benefits

Answer 9

• If taxes are too high and benefits are too generous, people might be more inclined to withdraw from the labour market.

Question 10

Factors affecting the supply of labour-training

Answer 10

• If a lot of training or high qualifications are required for a job, then the supply
  of labour may fall
• However, if the government subsidise training, it is easier for workers to gain the necessary skills for a job, so the supply of labour could increase.