Labour Market Flexibility

Question 1

What is meant by flexibility in the labour market?

Answer 1

Flexibility relates to the ability of labour supply to respond quickly and efficiently to changes in demand.

Important to keep firms costs low & improve international competitiveness. UK has one of the most flexible labour markets.

Question 2

What are the key aspects of labour market flexibility?

Answer 2

1. Labour mobility - possess transferable skills and the ability to acquire new skills ability to respond to regional patterns
2. Flexible working practices such as part time work, variable contract hours, shift work and temporary contracts = variable working hours meaning employer can change to match demand
3. Wage flexibility

Question 3

What are some examples of flexible working practices?

Answer 3

1. Part time work
2. Term time working
3. Job sharing
4. Flexitime
5. Compressed hours
6. Annual hours
7. Zero hour contracts

Question 4

Factors affecting labour market flexibility?

Answer 4

1. Level of government intervention
2. Power of trade unions
3. Regulations on dismissals
4. Minimum wage
5. Unemployment benefit
6. Unemployment rate
   (See sheet for detail)

Question 5

Factors which have led to the development of flexible labour markets?

Answer 5

1. Increasingly competitive product markets
2. Structure of the economy
3. Changed compositions of labour demand and supply

See book p51 for detail