The Long-run Supply Curve of Labour

The Long-run Supply Curve of Labour

  • In the long-run, there is time for people to change their occupation
  • In this time period, the supply of labour to a given firm or occupation is influenced by the net advantages of the job
    • These include both the pecuniary (financial) and non-pecuniary (non-financial) features of the job

Pecuniary Factors

  • Wage rate
    • The higher the wage rate, the more people are likely to want to do the job
  • The opportunity to work overtime and bonuses
    • People who are keen to raise their incomes by working extra hours, or people who are highly productive will be attracted to occupations that offer overtime work and bonuses.

Non-Pecuniary Factors

  • These are the non-pecuniary advantages and disadvantages of jobs that impact on the supply of labour, and they are:
  • The convenience and flexibility of hours
  • Status
  • Promotion chances
  • Flexibility of location
  • Qualifications and skills
    • Highly skilled workforce required = less demand
  • Job security
    • More secure job = more demand
  • Pleasantness of the job
  • Holidays
  • Perks and fringe benefits
  • The quantity and quality of training
  • Location
    • Close location to a worker will increase demand
  • The recent performance of the firm