Definition
- Government policy
- Government policy shifts labour supply through the qualifications it requires, the training it pays for, and benefits that change how attractive working is.
Example
Can you think of an example of government policy?
Suppose the government pays trainee nurses £5,000 a year towards their studies. More people qualify, so more nurses are on offer at a salary of £32,000 and at every other salary: supply shifts right.
Test yourself
Can you name the four factors that shift the supply of labour?