The Elasticity of Supply of Labour

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    The Elasticity of Supply of Labour

    • The extent to which the supply of labour changes as a result of a change in the wage rate is measured by the elasticity of supply of labour:
      • Elasticity of Supply of labour = (%change in the quantity of labour supplied)/(%change in wage rate)
    • The factors that influence elasticity of supply of labour are:
      • The qualifications and skills required
        • The supply of skilled workers is more inelastic than unskilled
      • The length of training
        • The longer training takes, the more inelastic supply will be.
      • The immobility of labour
        • The easier that workers find it to move from one area to another, the more elastic supply will be.
      • The time period
        • Supply will be more elastic with the longer the time period involved
        • g. a rise in the wage rate of barristers won’t have much of an impact in the short-run, but in the long-run, it will adjust, as students will want to study law, and do the necessary training.

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