Edexcel IGCSE Economics 1.2.5 The labour market Concept

Explain how demand for the final product (derived demand), availability of substitutes including machines, and workforce productivity affect demand for labour.

Factors affecting the supply of labour:

population size
migration
age distribution of population
retirement age
school-leaving age
female participation
skills and qualifications
ability to move geographic locations/move to different types of employment.

Importance of the quantity and quality of labour to business.

Impact of education and training on human capital and quality of labour.

Use labour-market diagrams showing labour supply, labour demand, equilibrium wage and employment, and the effects of shifts in labour demand or supply.

Trade union involvement in the labour market:

impact of trade union activity to improve working conditions and increase wages.

1.2.5 The labour market

1.2.5.a Factors affecting the demand for labour

1.2.5.b Factors affecting the supply of labour

1.2.5.c Importance of labour quantity and quality to businesses

1.2.5.d Education, training and human capital

1.2.5.e Labour-market diagrams

1.2.5.f Trade union involvement in the labour market

Objective notes