3.5.2 - supply of labour

Cards (7)

  • The supply of labour curve shows the ability and willingness of people to make themselves available to work at different wage rates.
  • Factors influencing the supply of labour
    • the wage
    • Population and distribution of age
    • Non-monetary benefits
    • Education/training/qualification
    • Trade unions and barriers to entry
    • Wages and conditions of other jobs
    • Legislation
  • Elasticity of labour supply
    1. Skills & qualifications
    2. Unemployment levels
    3. Time
  • If a job as no skill requirements an increase in wage would lead to an increase in supply as it is easy to get employed. Therefore supply is elastic
  • In a market where the job requires lots of skills and qualifications supply will be inelastic
  • High unemployment would suggest elastic supply as if wages increase the supply would increase as it would be very responsive to a change in wage
  • If unemployment is low the supply of labour will be inelastic as an increase in wage will only lead to a small increase in supply, so supply would be unresponsive to wage changes