The Elasticity of Supply of Labour

The Elasticity of Supply of Labour

• The extent to which the supply of labour changes as a result of a change in the wage rate is measured by the elasticity of supply of labour:
  • Elasticity of Supply of labour = (%change in the quantity of labour supplied)/(%change in wage rate)
• The factors that influence elasticity of supply of labour are:
  • The qualifications and skills required
    • The supply of skilled workers is more inelastic than unskilled
  • The length of training
    • The longer training takes, the more inelastic supply will be.
  • The immobility of labour
    • The easier that workers find it to move from one area to another, the more elastic supply will be.
  • The time period
    • Supply will be more elastic with the longer the time period involved
    • g. a rise in the wage rate of barristers won’t have much of an impact in the short-run, but in the long-run, it will adjust, as students will want to study law, and do the necessary training.