Labour Market MCQ 2

Demand and Supply Curves

Factors Influencing Demand for Labour

• Demand for a firm's output affects the demand for labour, as an increase in output demand leads to an increase in labour demand.
• Technological advancements can influence labour demand, as automation may replace certain jobs or create new ones.
• Employer's PRSI (Pay-Related Social Insurance) contributes to the cost of hiring labour, affecting demand.
• State subsidies, such as the JobsPlus Scheme, can incentivize employers to hire more labour.
• Foreign Direct Investment (FDI) can also impact labour demand, as foreign companies may bring new job opportunities.

Factors Influencing Supply of Labour

• The size of the population of working age affects the labour supply, as a larger population provides more potential workers.
• The labour force participation rate, which is the percentage of the population actively working or looking for work, influences labour supply.
• Mobility of labour, both occupational and geographical, affects the labour supply, as it determines how easily workers can move between jobs and locations.

Mobility of Labour

Occupational Mobility

• The willingness of an individual to move from one occupation to another is influenced by:
  • Qualifications and training required for a particular occupation
  • Restrictions on the number of workers allowed in certain occupations, such as limitations on the number of students studying medicine

Geographical Mobility

• The willingness of an individual to move from one location to another for employment is influenced by:
  • Age, as older workers may be less willing to relocate
  • Family situation, as those with family ties may be less willing to move
  • Property prices, which can affect the cost of living in a new location
  • Visas and work permits, which can restrict an individual's ability to work in a particular location
  • Incentives, such as the HSE's 'bring them home' scheme, which can encourage workers to relocate
  • Availability of information about job opportunities and living conditions in other locations

Labour Productivity

• Labour productivity measures the output produced by a worker per period of time.

Marginal Productivity Measures

• Marginal Physical Product of Labour (MPP): The extra output generated as a result of employing an extra unit of labour.
• Marginal Revenue Product of Labour (MRP): The extra revenue generated as a result of employing an extra unit of labour.

Test your understanding of the labour market, including the factors that influence demand and supply of labour, and occupational mobility. Assess your knowledge of labour economics and its key concepts.