Determinants of Labour supply
- The health conditions of the worker. Good health conditions of the worker increase labour supply while poor health conditions reduce labour supply.
- The level of education and skills. There higher the level of education and the skills possessed by the workers, the higher the supply of skilled labour but the lower the level of education and skills the lower the supply of skilled labour.
- The rate of population growth. The higher the rate at which the population grows, the higher the supply of labour and the lower the rate of population growth, the lower the supply of labour.
- The level of experience and expertise needed for a particular job. When the job requires high experience, for example 20 years, the supply of labour for that job reduces. But when the level of experience required is low, then labour supply increases.
- The nature of the job. The higher the risk on the job, the lower the labour supply and the lower the risk of the job, the higher the labour supply.
- Level of motivation at work. High motivation in form of attractive wages, better working conditions etc. increase labour supply but poor motivation of workers in form of low payments and poor working conditions reduce labour supply.
- The rate of investment in the economy. The higher the investment rate, the higher the labour supply. This is because an increase in investments increases the work activities hence an increase in labour supply. But the lower the investment rate, the lower the supply of labour.
- Degree of mobility of labour. The higher the degree of labour mobility geographically an occupationally, the higher the labour supply and the lower the degree of labour mobility, the lower the labour supply.
- The government policy. Government policies in form of early retirement age of workers, restrictions on child labour etc. reduce labour supply. But if the government policy is in support of labour supply for example recruitment of workers in civil service, high retirement age etc. increases labour supply
- The degree of political stability. The higher the degree of political stability in the country, the higher the labour supply and the lower the degree of political stability, the lower the labour supply.
CATEGORIES Economics
TAGS Dr. Bbosa Sciece
