Labour Market Flashcards
What factors influence the demand for labour?
1-The price of the good or service: The higher the price of the good or service, the more profitable it is for firms to produce it, and the more labour they will demand.
2-Productivity of labour: The more productive workers are, the more output they can produce per hour, and the more labour firms will demand.
3-The cost of labour: The higher the cost of labour, the less profitable it is for firms to hire workers, and the less labour they will demand.
4-The cost and availability of substitutes: If there are good substitutes for labour, such as capital or automation, firms will be less likely to demand labour.
5-The level of technology: The higher the level of technology, the more productive workers can be, and the more labour firms will demand.
6-The level of government regulation: The more regulations there are on businesses, the more costly it is for them to operate, and the less labour they will demand.
7-The level of economic activity: The higher the level of economic activity, the more goods and services are being produced, and the more labour firms will demand.
Derived Demand:
The demand for labour is a derived demand, meaning that it depends on the demand for the goods and services that labour produces.
Main causes of geographical immobility in the UK labour market:
1 Housing - cost high housing costs in certain regions, particularly major cities like London, can be a significant barrier to mobility. Workers may be hesitant to move to areas with expensive housing, even if job opportunities are more abundant, due to concerns about affordability.
2 Families and social ties - Moving away from friends and family can be emotionally challenging and may deter individuals from seeking employment in other regions.
3 Education institutions - Access to quality schools and educational institutions can influence decisions about moving.
4 Costs of living - High living costs, including transportation, healthcare, and childcare, can discourage individuals from relocating to areas with a higher cost of living.
5 Limited access to transportation - limited access to public transportation can make it challenging for individuals to commute to work.
