3.5.2 - supply of labour

• 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