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Wages as a factor affecting supply
increase in wages leads to an increase in hours worked at first, but beyond a certain point it will lead to a decrease in hours worked
increase in wage rates may not increase the number of hours worked by existing labour, it will increase the number of workers
Population and distribution of age as a factor affecting supply
high population means large supply of labour
high people of working age to ensure there is lots of labour
migration influence
Non-monetary benefits as a factor affecting supply
supply increase if high job satisfaction, such as holidays, hours, flexibility etc…
Education/training as factors that affect supply
more educated workers means higher supply of workers
occupations with high levels of education may suffer from lower supply of labour
Trade unions and barriers to entry as factors affecting supply
trade unions may be able to restrict supply of labour by introducing barriers to entry
Wages and conditions of other jobs as a factor affecting supply
jobs in local area considered to be unpleasant and offer low wages, they supply for alternatives will be higher
Legislation as a factor affecting supply
government rules can affect supply of labour
What is occupational immobility
where workers find it difficult to move from one job to another because of a lack of transferable skills
What is geographical immobility
where workers find it difficult to move from one place to another due to the cost of movement, family etc…
What can immobility lead to
there can be excess supply of labour in one area/occupation and excess demand in another
What could cause an outward shift of labour supply
rise in net inward migration of workers, extra investment in human capital, fall in relative wages in substitute jobs, demographic trends
What is the backward bending labour supply curve
A graphical device showing a situation in which as real wages increase beyond a certain level, people will substitute time previously devoted for paid work for leisure
leading to a decrease in the labour supply
4 causes of occupational immobility
experience gaps, skills gaps, low confidence, education gaps
6 causes of geographical immobility
family ties, high costs of property, migration controls, language barriers, access to good schools, high costs of commuting
Labour shortages in the UK - example (APPLICATION)
many countries have experienced labour shortages, skileld workers have become scarce
labour shortages can lead to a rise in wages, businesses are struggling to recruit and retain people
