What are the causes of backward sloping supply curve of Labour?
- Presence of target workers. These are workers who work only to fulfill their targets or objectives after which they abandon work or decide to work for fewer hours. This violates the law of supply.
- High preference for leisure. As workers earn more wages, they prefer leisure to work and therefore they end up working for fewer hours, I . .
- Decline in the real wage of workers due to high levels of inflation .This forces workers to work for fewer hours.
- Use of progressive taxation by the government. That is where the tax rate increases as the income of the tax payer increases. These discourages hard work for high wage earners and are forced to work for fewer hours so as to earn a lower wage and pay less taxes.
CATEGORIES Economics
TAGS Dr. Bbosa Science
