Question

How does labor supply depend on the wage? What other factors affect labor supply?

Answer 1

Answer : Labour supply means that total number of hours people are willing and able to work for a given wage rate.

The labour supply of a firm or an industry is upward sloping .The reason behind it was that as wages rises, other workers have attract and want to enter in this industry.

The extent to which wages rises or flucated directly lead to an expansion of the Labour supply curve. It directly depend upon Elasticity of the Labour supply.

Factor other than wages affect labour supply are

• Overtime : Opportunities to increases in the earnings through overtime payments, productivity related pay schemes etc.
• Substitutes occupation : The real wage rate offer in competition jobs affect the wage and earning differential that exist between two or more occupation.
• Job security, working condition , opportunity promotion are the factors which influence the labour supply.