3.5.2 Supply of labour

• Factors that determine the supply of labour to an industry

  1) Changes in migration

  2) Income tax

  3) Benefits

  4) The presence of trade unions

  5) Social trends

  6) Required skills and qualifications

  7) Wages in other industries
• Labour market participation rate:


  The % of the working age population that are willing and able to work.
• Underemployment:

  When a worker is employed but is working fewer hours than they would wish to.
• Causes of market failure in labour markets

  -Geographical immobility of labour

  -Occupational immobility of labour
• Geographical immobility of labour + causes

  Workers find it difficult to move from one area to another.

  Causes:

  -Personal reasons (e.g. wanting to be close to family)

  -The cost of travel (commuting) / cost of accommodation

  -Language barriers
• Occupational immobility of labour + causes


  When workers find it difficult to move from one occupation to another.

  Causes:

  -Lacking qualifications

  -Lacking skills