6.2 Influences upon the supply of labour to different markets

the supply of labour is influenced by

monetary and non monetary factors

what does the supply curve of labour show

the relationship beteen the wage rate and the number of workers willing to work in an occupation

examples on non monetary factors that influence the supply of labour

working conditions (safety, comfort)

job satisfaction

work life balance (remote work, flexible hours, unsociable hours)

job security

location

career progession/opportunities

perks and benefits (staff discounts, anual leave)

what is the difference between how changes in monetary and non monetary factors are shown graphically

non monetary → shift in the supply of labour

monetary → movement along the supply curve

causes of a shift in the market supply of labour curve

migration

education & training

changes in non monetrary factors

changes in income tax or benefits

demographic changes

changes in alterntive opportunities

changes in social attitudes

explain the impact of changes in income tax and benefits on the supply of labour

lower taxes → restore personal incetives → opportunity cost of not working increases → shifts supply to the right

lower benefits → reduces the replacement ratio → makes working more attractive

explain the impact of the changes in migration on the supply of labour

increased immigration → increases the labour pool → supply to the right

increced emmigration → fewer workers → supply to the left

case study on the impact of migration on the supply of labour

Afer UK left the EU, it lost access to the free movement of labour under the single market, led to a reduction in EU migrant workers due to tighter immigration rules

the number of HGV drivers fell by 50000 in 4 years

lead to severe shortages → delays in fuel and food deliveries → supply chain disruptions

policy response: UK added HGD, to the shortage occupation list → granted temporary visas

Evaluation: short term vs long term impact (in long run can work on domestic training schemes)

how do changes in demographics and social attitudes effect the supply of labour

social attitudes change eg more working mothers → increase supply of labour

demographic changes → eg increassing the retierment age

statistic on working mothers

rise form 66% in 2002 to 76% in 2021

determinants of PES of labour

skill level and training ease

government regulations

apeal of job

long run or short run

geographical and ocupational mobility

how does regulation impact supply of labour (dental case study)

Reservation wage

the lowest wage any worker is willing to accept (W0)