Factors Affecting Demand and Supply of Labour

Factors affecting demand and supply

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Factors Affecting Demand and Supply of Labour by Mind Map: Factors Affecting Demand and Supply of Labour

1. Demand

1.1. Micro-economic factors

1.1.1. includes specific industry and firms conditions that influence the demand and supply of labour for particular occupations and labour skills in an economy 1. Size and Nature of the Business 2. Pattern of consumer demand and output 3. Wage rate conditions of employment offered 4. The productivity of labour 5. Rate of capital/labour substitution 6. The rate of structural change and entrepreneurial expectations

1.2. Macroeconomic factors

1.2.1. refer to conditions in the economy as a whole which can affect the general labour market 1. Changes in the total level of economic activity 2. Productivity of laobur 3. General wage rate 4. Government industrial relations policies 5. Level of industrial disputation

2. Supply

2.1. Micro-economic factors

2.1.1. supply of labour to individual firms and industries depend on the wage rate, conditions of employment, education, training, qualifications, skills and experiences etc 1. Wage rate and other incentives 2. Attractive or pleasant conditions of work 3. Education and training qualifications 4. Labour's geographical 5. Labour's occupational mobility 6. Labour market institutions

2.2. Macroeconomic factors

2.2.1. determined by the size of the workforce which includes all those people employed (both part time and full time) plus those unemployed but actively searching for jobs 1. Size of population 2. Age distribution of the population 3. Participation rate 4. Average number of hours worked