Wage differentials and labour market Flashcards
What’s wage differentials
How a worker can demand different wages due to them having different qualifications and skillsets to others
Elasticity demand for labour
Measures the degree of responsiveness of demand for labour after a given change in wage
Elasticity supply of labour
How responsive supply for labour is after a given change in wage
What are the demand for labour factors
Time
Substitutes
Percentage of total costs
What makes demand of labour inelastic
high wages
time to get qualification
low substitutes
high percent of total costs
what makes demand of labour elastic
highly substitutable
low time
low percentage of total costs
low wages
What factors affect elasticity supply of labour
Time
Skillset
Unemployment
What makes supply of labour elastic
Short time to get qualified
high unemployment
low skillset
What makes supply of labour inelastic
long time to get qualified
high unemployment
high skillset
How do government intervene in labour market
National minimum wage
Max and Min prices
Laws to protect consumer
Trade Unions
What’s geographical immobility of labour
When workers find it hard to move from one area to another
What’s occupational immobility
Ability of workers to transfer from one occupation to another, based on skills they possess
