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Here we show how labor supply of a representative household can be calibrated to a set of three aggregate labor supply elasticities: (i) Elasticity of participation with respect to the wage (ii) elasticity of working hours with respect to the wage and (iii) elasticity of working hours with respect to (non-wage) income.

 

Unions can affect the supply of labour in three ways. Firstly unions can attract workers into the labour market because of the benefits of becoming a member. This will shift the supply curve to the right. Secondly unions exert control over the labour supply and can withdraw labour by limiting working hours or going on strike.

 

The supply curve is given by SS and the demand curve by DD. The horizontal axis gives the quantity of labour employed and the vertical axis the nominal wage per unit of labour under the assumption that the general price level is constant. The demand for labour will be negatively sloped in all types of production for two reasons.

 

Labour Economics is designed to address topics covered in a graduate certificate college level economics course. Topics include economic concepts supply and demand in product and labour markets employment unemployment labour market trends elasticity compensation and earnings differentials and education and training. Chapters have examples glossary terms and review questions to check ...

 

Labor Supply Curve: By varying the wage rate (W) and considering how it affects the individual?s choice of hours worked you can derive the labor supply curve. This curve typically slopes upward because at higher wages the substitution effect tends to dominate the income effect leading to an increase in labor supply.

 

A look at factors that determine an individuals supply of labour and the market supply of labour. Higher wages usually will encourage a worker to supply more labour because work is more attractive compared to leisure.