Supply of Labour

Question 1

Give four factors which cause shifts in the supply of labour to an occupation/industry

Answer 1

.Real wage rate
.Wages on offer in substitute occupations
.Barriers to entry
.Improvements in occupational mobility of labour and stock of human capital
.Non monetary characteristics of specific jobs
.Net migration of labour
.Demographic factors
.People’s preferences

Question 2

Give two non-economic factors as to why labour supply to an occupation is affected

Answer 2

.Working conditions
.Amount of leisure time
.Facilities available at work
.Ability to work flexible hours
.Opportunities for career progression/travel

Question 3

What does elasticity of labour supply describe?

Answer 3

It describes the responsiveness of the quantity of labour supplied in response to wage change

Question 4

Give two factors affecting the elasticity of supply of labour to an occupation/industry

Answer 4

.Nature of skills and qualifications required to work in an industry
.Vocational nature of work
.Time period

Question 5

Give two reasons as to why geographical immobility exists

Answer 5

.Family and social lives-people reluctant to move
.Financial costs in moving home
.High cost of renting a suitable property
.Cultural and language barriers
.Differences in cost of living between locations

Question 6

What are the main causes of occupational mobility?

Answer 6

.Skills gaps
.Training gaps
.Experience gaps
.Confidence and motivation
.Discrimination

Question 7

What and why does the poverty trap cause a disincentive for?

Answer 7

It creates a disincentive to look for work or work longer hours because of the effects on the tax and benefit system

Question 8

When does labour market discrimination occur?

Answer 8

When an employer uses/metrics other than the measured productivity of a worker to judge their attractiveness for a job/role