Labour Markets Flashcards
Features of elastic supply of labour
Low skilled
Low or quick to achieve qualifications
Features of inelastic supply of labour
High skilled
Hard and long qualifications
Economic rent
The added income to what your minimum wage you’d work for
Transfer earnings
Minimum amount of wage needed to retain FOP(labour)
Factors affecting demand for labour
Demand for the food or service
Industry wage
Technological differences
Prices of other factors of production
Unit labour costs
Total labour cost/ total level of output
Factors affecting supply of labour to industry
Number of qualified people
Difficulty of acquiring qualifications
Non wage benefits
Wage differentials
Described as the difference in wages between workers
Due to :
Education and skills
Occupations
Trade unions
Discrimination
Labour market flexibility
Degree in which labour markets change to adapt to changing conditions in a market
Feature include
Skilled workforce
Competitve labour market
Flexible working hours and contracts
Ways in which labour market flexibility can increase
Govt:
Reducing minimum wage
Encourage immigration
Limit power of trade unions
Improved info to address all the types of unemployment
Geographical mobility of labour
Ability within an economy for a worker to move between different regions to seek work
Factors affecting this
Transport
Housing availability and affordability
Occupational mobility of labour
Ability of a worker to move between occupations
Determined by
Skills and qualifications
Structural demands- is there any demand for these workers?
Transport
Elasticity of demand for labour affected by
Substitutes -less makes it inelastic
Percentage of total cost — lower inelastic as wage increase won’t matter as much
Time - sr inelastic
