The Long-run Supply Curve of Labour

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    The Long-run Supply Curve of Labour

    • In the long-run, there is time for people to change their occupation
    • In this time period, the supply of labour to a given firm or occupation is influenced by the net advantages of the job
      • These include both the pecuniary (financial) and non-pecuniary (non-financial) features of the job

    Pecuniary Factors

    • Wage rate
      • The higher the wage rate, the more people are likely to want to do the job
    • The opportunity to work overtime and bonuses
      • People who are keen to raise their incomes by working extra hours, or people who are highly productive will be attracted to occupations that offer overtime work and bonuses.

    Non-Pecuniary Factors

    • These are the non-pecuniary advantages and disadvantages of jobs that impact on the supply of labour, and they are:
    • The convenience and flexibility of hours
    • Status
    • Promotion chances
    • Flexibility of location
    • Qualifications and skills
      • Highly skilled workforce required = less demand
    • Job security
      • More secure job = more demand
    • Pleasantness of the job
    • Holidays
    • Perks and fringe benefits
    • The quantity and quality of training
    • Location
      • Close location to a worker will increase demand
    • The recent performance of the firm

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