Determinants of Demand for Labour (firms perspective)

• Demand for final product
  • ↑ demand for gd/ss >> ↑ marlet price >> incentive for producers to increase their Quantity Suppled >> ↑demand for labour
• Productivity of labour
  • when labour becomes more productive, it becomes more attractive than capital >> ↑demand for labour
• Technology
  • productivity of labour ↑ due to technology, hence demand for labour ↑ (eg engineers and computers)
  • HOWEVER, may make some types of labour obsolete, demand for labour falls
• Price and Availability of substitutes (?)
  • If capital price ↑, price of labour is cheaper and hence demand ↑)

Determinants of Supply (workers perspective)

• No. of qualified people
  • training and education >> ↑ skilled workers >> ↑ supply of qualified labour
  • Therefore market labour supply curve will shift to the right
• Non-wage component (__monetary and non-monetary benefits__)
  • monetary: holidays, perks, fringe benefits (medical)
  • non: pleasant working environment, job satisfaction

Wage differentials:

• non-monetary factors (Unpleasant working environment, inconvenient working hours, far from home)
  • workers are given compensating wage differentials
• idk