- Supply of labour
- The supply of labour is the quantity of labour workers are willing to offer at each wage, trading paid work against time spent in leisure.
- Demand for labour
- The demand for labour is the quantity of labour employers wish to hire at each wage, other things being equal.
Factors that shift the supply of labour
Can you name the four factors that shift the supply of labour?
Each moves the whole curve, so more or fewer workers are on offer at every wage.
The number of workers is the pool of people who could offer their labour, which grows with population, migration and more people choosing paid work.
Can you think of an example?
More women working outside the home raised the number of people offering their labour, so more is on offer at every wage. An ageing, retiring population does the opposite.
Required education is the schooling and training a job demands, and the more a job requires, the lower the supply of labour to it.
Can you think of an example?
There are fewer cardiologists than GPs, and fewer doctors than nurses, because each step up takes years more training.
Government policy shifts labour supply through the qualifications it requires, the training it pays for, and benefits that change how attractive working is.
Can you think of an example?
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.
Non-wage features of a job, such as its hours, flexibility, safety and status, change how many people want it at any given wage.
Can you think of an example?
A hospital offering flexible shifts attracts more nurses at the same pay. A dangerous or unpleasant job attracts fewer people at any wage.