3.5.2 Supply of labour

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    a) Factors that influence the supply of labour to a particular occupation
    Supply of labour is calculated by the number of workers willing and able to work at the current wage rate, multiplied by the number of hours they can work

    b) Market failure in labour markets: the geographical and occupational mobility and immobility of labour
    Mobility of labour is the ability of workers to change between jobs
    Geographical immobility of labour (factors of production)
    Obstacles which prevent factors of production moving between areas
    E.g. Labour might find it hard to work due to:
    • Family and social ties • Financial cost involved with moving • Imperfect market knowledge on work • Regional variations house prices • Living costs across the UK (difference in living and renting cost) • Migration controls • Cultural and language barriers
    Occupational immobility of labour (factors of production)
    Obstacles which prevent factors of production changing their use
    E.g. Labour might find it difficult to change occupation
    Occurred in UK with collapse of the mining industry, when workers didn’t have transferable skills to find other work
    Causes include insufficient education, training and skills
    Leads to structural unemployment – waste of scarce resources and represents market failure

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