The Labour market Flashcards
What factors affect the demand for labour?
Demand for the final product (derived demand): The need for labour depends on the demand for the goods or services produced.
Availability of substitutes, including machines: Increased automation can reduce the demand for human labour.
Productivity of workforce: More productive workers are more likely to be in demand.
What factors affect the supply of labour?
Population size: Larger populations increase the potential workforce.
Migration: Inflows of workers from other countries increase labour supply.
Age distribution of population: A higher proportion of working-age people increases labour supply.
Retirement age: A higher retirement age keeps people in the workforce longer.
School-leaving age: A lower school-leaving age increases the workforce earlier.
Female participation: Greater involvement of women in the workforce increases supply.
Skills and qualifications: The availability of skilled workers affects supply.
Ability to move geographic locations or between types of employment: Mobility increases labour supply flexibility.
Why is the quantity and quality of labour important to businesses?
Quantity: Determines how many workers are available to meet production needs.
Quality: Higher-skilled and educated workers contribute to higher productivity and efficiency.
How does education and training impact human capital and the quality of labour?
Education: Improves skills and knowledge, increasing worker efficiency.
Training: Provides specific expertise, making workers more productive and adaptable.
Human capital: Enhanced by education and training, leading to a more competitive workforce.
What does a labour market diagram show?
Supply of labour: The quantity of workers willing to work at different wage levels.
Demand for labour: The quantity of labour employers are willing to hire at different wage levels.
Market equilibrium wage and quantity: Where the supply and demand curves intersect, determining the wage rate and employment level.
What happens to the equilibrium wage and employment level when the demand for labour increases?
The demand curve shifts right, leading to higher wages and increased employment.
What happens when the supply of labour increases?
The supply curve shifts right, leading to lower wages and higher employment.
What is the role of trade unions in the labour market?
Improving working conditions: Trade unions negotiate better workplace standards.
Increasing wages: Unions advocate for higher pay for their members.
Reducing exploitation: Ensure fair treatment of workers by employers.
How do trade unions impact wages?
By collective bargaining, trade unions can push wages above market equilibrium, benefiting workers but potentially reducing employment levels.
