8.3.6—Labour supply shifts/movements

A movement along labour supply follows a change in the wage. A shift changes the quantity offered at every wage because population, migration, skills, preferences, taxes, benefits or working conditions change.

Separate an individual’s response from a market-wide change. Better childcare or immigration can shift supply right; a wage rise changes quantity supplied along the existing curve unless it also changes another determinant.

A higher wage may attract more nurses along the curve. A new training programme increases the number qualified and can shift the market supply curve right.

Do not draw a supply shift merely because employment rose; identify whether the wage or the underlying labour pool changed.