3.5.2 Supply for Labour

What is the formula for calculating the supply of labour?

The number of workers willing and able to work at the current wage rate, multiplied by the number of hours they can work.

How does the wage rate affect the supply of labour?

An upward sloping supply curve shows a proportional relationship between the wage paid and the number of workers willing to work.

What demographic factors influence the supply of labour?

Population size, retirement and school leaving ages, number of university students, and immigration.

How does migration impact the supply of labour?

Migration increases the supply of labour at all wage rates, particularly at lower wage rates.

What non-monetary advantages can influence the supply of labour?

Factors such as lower costs of working (e.g., affordable childcare) and high benefits of working can increase labour supply.

How does leisure time affect the supply of labour?

Leisure time is a substitute for work; choices between work and leisure can influence the amount of labour supplied.

What role do trade unions play in the labour market?

Trade unions can attract workers by defending employment rights, but may also limit some workers' participation in the labour market.

How do taxes and benefits influence the supply of labour?

High taxes and generous benefits may discourage people from participating in the labour market.

What effect does training have on the supply of labour?

High training or qualification requirements can reduce supply, but government subsidies for training can increase it.

What is labour immobility?

Labour immobility occurs when workers cannot easily move to alternative jobs due to lack of skills or experience.

What are the two types of labour immobility?

Geographical immobility and occupational immobility.

What causes geographical immobility?

Factors include the cost of moving, imperfect information, and reluctance to leave family and friends.

What is occupational immobility?

It occurs when workers lack the skills required for different types of work, often due to a skills shortage.

What are monetary factors influencing supply in labour markets?

Wages, as workers seek to maximize their earnings.

What are non-monetary factors influencing supply in labour markets?

Fringe benefits, working conditions, job satisfaction/dissatisfaction, and economic welfare from leisure time.

What happens if labour is immobile in response to changes in supply and demand?

Markets may struggle to clear, leading to distortions and delays in reaching market equilibrium.

What is the relationship between demand and supply in labour markets?

If demand increases but supply is fixed, distortions occur until market equilibrium is restored.