The Supply of Labour

The Supply of Labour

The supply of labour is by definition ¡°the number of workers of more generally, the numbers of labour hours available to the economy¡±. The supply of labour can be established by a various number of both macroeconomic and microeconomic factors. First and foremost, is the wage factor which not only affects supply in different ways but will also affect other factors. The supplementary factors are: preference of consumption versus leisure, institutional rigidities (i.e. trade unions and government legislations), the size and abilities of the adult population and additional factors such as sudden supply shocks.

Wage is a key factor in influencing the supply of labour in a number of ways, one of them being the change in wage rate; that is increases or decreases. The level of income offered by firms determines how willing workers are in supplying their labour. Generally speaking as the price rises it can be seen form the supply curve that quantity of supply al...