elasticity of the labour supply curve

• What does the elasticity of the labor supply curve measure?

  Responsiveness of labor supply to wage rate changes
• What does an elastic labor supply curve indicate?

  Proportionate change in labor supply is greater than wage change
• What does an inelastic labor supply curve indicate?

  Proportionate change in labor supply is less than wage change
• What are the four key determinants of the elasticity of labor supply?

  • Nature of skills required
  • Length of training period
  • Vocational elements of professions
  • Time period under consideration
• How does the nature of skills required affect labor supply elasticity?

  Greater skills make supply more inelastic
• Why does specific skill sets make labor supply more inelastic?

  It is hard for workers to gain skills
• How does a long training period affect the elasticity of labor supply?

  It makes labor supply more inelastic
• What effect does a vocational element have on the elasticity of labor supply?

  It makes labor supply more wage inelastic
• Why are teachers less responsive to changes in wages?

  They have vocational reasons for teaching
• What is the impact of the time period under consideration on labor supply elasticity?

  Supply is more inelastic in the short run
• Why is labor supply more wage inelastic in the short run?

  Workers take time to adapt to changes
• Why might workers wait before leaving a profession after a wage decrease?

  They want to see if the change is permanent
• How does the elasticity of labor supply change in the long run?

  It becomes more elastic