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Edexcel B A Level Economics > 3.5: Global labour markets > Flashcards

3.5: Global labour markets Flashcards

(86 cards)

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1
Q

when do populations grow?

A

when the birth rate is higher than the mortality rate

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2
Q

why do many developing countries have growing populations?

A

advances in diet and healthcare increase life expectancy - birth rate still relatively high
middle east and africa

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3
Q

why do many developed countries have relatively stable populations?

A

low mortality rates and falling birth rates

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4
Q

what does structural change require?

A

increased mobility in the labour market
increased occupational mobility with retraining focussing on transferable skills
geog

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5
Q

what happens to employment when economies become more developed?

A

employment in primary and secondary sectors reduce - increased mechanisation and both agriculture and extractive/mining industries

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6
Q

how has globalisation driven structural change and changes to employment patterns and interdependence?

A

low skilled labour off-shored to developing countries
knowledge based jobs in dvlpd economies - increasing gap between rich and poor
interdependence greater
china has abundant low cost labout for manufacturing sect - wages starting to rise in industrialised SE china

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7
Q

how has globalisation changed labour requirements?

A

rapid change in countries like s korea and taiwan
trade liberalisation - off shoring and low wages paid in dvlping economies have helped to suppress wages of low-skilled jobs in dvlping countries
dvlped countries can be competitive by providing higher quality products and services

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8
Q

give some examples of key labour migration figures

A

more than 200 million people live in countries in which they were not born
likely at least 1 million Chinese migrants living in Africa
migration overwhelmingly from less developed to more developed nations

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9
Q

what are the 8 factors affecting migration?

A
  1. differences between wages for same jobs
  2. access to benefits system of host countries - education + health care
  3. varied employment opportunities
  4. desire to travel, learn new language, develop networks
  5. desire to escape corruption and repression
  6. impact of satellite tv and internet in changing people’s expectations
  7. effects of cheaper trans-national phone calls + more affordable air travel and coach travel
  8. unwillingness of people within domestic economy to take ‘bad’ jobs`
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10
Q

how does inward labour migration provide fresh skills?

A

migrants can provide complementary skills to domestic workers - can raise productivity of both
(brazilian child minder provides good quality care at an affordable price so highly paid female magazine editor can still work)

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11
Q

how does inward labour migration drive innovation and entrepreneurship?

A

can be a driver of technological change and innovation - teams of people working together that have different perspectives and experiiences
migrant networks accelerate spread of technology

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12
Q

how does inward labour migration put pressure on the govt to reform?

A

can put political pressure on failing govts and regimes
eg mass exodus of productive workers from Zimbabwe

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13
Q

how does inward labour migration have a multiplier effect?

A

new workers create new jobs - multiplier effect if they find work and contribute to nation’s GDP through higher level of AD

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14
Q

how does inward labour migration reduce skilled-labour shortages and expand the labour supply?

A

can help to relieve labour shortages and help control wage inflation
eg recruitment of doctors in NHS

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15
Q

how does inward labour migration make a country attractive to FDI?

A

availability and quality of labour key factor for investment

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16
Q

how does inward labour migration affect income flows?

A

remittances sent home by migrants add to GNI of home nations
if boost spending then may mean more demand for exports of other nations

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17
Q

how does inward labour migration affect tax revenues?

A

legal immigrants in work pay direct and indirect taxes - likely to be net contributors to govts finances

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18
Q

summary of benefits of migration

A
  1. fresh skills
  2. driver of innovation and entrepreneurship
  3. pressure on government to reform
  4. multiplier effects
  5. reducing skilled-labour shortages and expanding the labour supply
  6. making a country attractive to FDI
  7. Income flows (remittances)
  8. tax revenues
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19
Q

summary of disadvantages of inward migration

A
  1. welfare costs
  2. worker displacement
  3. social pressures
  4. pressure on property pieces
  5. benefit claims
  6. who really gains?
  7. poverty risks
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20
Q

how can inward migration affect welfare costs?

A

increasing cost of providing public service as migrants come into a country

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21
Q

how can inwards migration affect worker displacement?

A

possible displacement effects of domestic workers

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22
Q

how can inward migration affect social pressures?

A

social tensions arise from problems of integrating hundreds of thousands of extra workers into local areas and regions

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23
Q

how does inward migration affect property prices?

A

rising demand for housing forces up prices and rents

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24
Q

how does inward migration affect benefit claims?

A

many immigrants find it hard to get work

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25
how does inward migration help people gain?
benefits of migration focussed mainly on employers - especially those who take on illegal worker at low wages
26
how does inward migration affect poverty risk?
may have the effect of worsening the level of relative poverty in a society many migrant workers have complained of exploitation by businesses that have monopsony power in a local labour market
27
what do the benefits and costs of labour migration often depend on?
1. types of people who migrate 2. ease with which they assimilate into a new country and whether they find regular jobs 3. rise in labour migration stimulates capital spending by firms and govt 4. lenght of migration - long term?
28
name three countries founded by 1st or 2nd generation immigrants
apple, google, ibm
29
what is china's latest annual gdp growth?
6.7%
30
what is china's gdp or gni per capita?
$13170
31
what is china's inflation rate?
1.7%
32
what is china's unemployment rate?
4.1%
33
what is china's latest hdi ranking?
91/189
34
what is the % of china's population that is living in extreme poverty?
6.2%
35
what is the economic structure of the chinese economy?
primary: 9% industrial: 43% services: 48%
36
what are the key risks to sustainable growth in china?
rising inequality - strain on social stability excess capacity - deflation declining working age population threats from rising pollution and water scarcity
37
what are 3 factors that are limiting development progress in china?
hukou registration system - limits labour mobility dual economy - low per capita income in rural areas under funded state health care and pension systems
38
what are 3 policies used to improve supply-side in china?
creation of special trade zones + open up more industries to private investment crack down on corruption + end of 1 child policy basic medical insurance for 90% of population
39
what are long term challenges for china?
growing rich before china grows old shifting to lower, but higher quality growth rebalance towards higher value manufacturing and service industries and land reforms to improve farming improve allocative efficiency and raise productivity
40
what are competitive strengths for china?
huge fx reserves ($3.3T) large and growing domestic consumer market china leads way in renewable energy investment rising no of chinese mncs rising world influence
41
what are the main weaknesses in the chinese economy?
high rate of corruption, poor hr record excessive investment + low rate of consumption very high rates of debt rapid wage growth shifting some fdi out of china huge disparities in wage level in urban v rural
42
what is china's overall debt as a % of gdp?
280%
43
what has been the foundation of chinese growth?
capital investment (I) and exports (X)
44
how can china sustain growth?
rely less on low/medium value exports and move up value chains to produce high value high knowledge goods more growth from domestic consumption address rising pressures from inequality
45
what will china account for in terms of the worlds gdp?
19%
46
describe china's sovereign wealth fund
China Investment Corp - make portfolio investment overseas
47
what is the main reason for wage acceleration in china?
china is ceasing to be a labour surplus country - still lower compared to other emerging nations / developed economies
48
what is china's demographics?
median age - 35.2 and rising life expectancy soared but fertility plummeted by 2030, there will be barely 2 workers for every over 60 old age dependency ratio will double in 20 years
49
what are the social pressures in china?
wages rising due to growing concerns among authorities about income inequality - tens of millions of workers migrated to cities from rural areas labour shortages and worker unrest
50
summary of consequences of lengthy period of rapid wage inflation in china
costs and profits fdi shift income and consumption trade balances productivity and innovation
51
how are costs and profits affected by rapid wage inflation?
short-term squeeze on profits for manufacturers like Nike
52
how is FDI shift affected by rapid wage inflation?
might be a shift of FDI away from China to lower-cost countries like Bangladesh HOWEVER, might be small due to factors unique to china
53
what are the positive factors unique to china?
high manufacturing reliability close access to growing domestic market excellent supply chains external economies of scale commitments to increasing productivity and quality
54
how might income and consumption be affected by rapid wage inflation?
rising wages help boost demand for consumer durables, leisure activities and housing - new source of demand
55
how might trade balances be affected by rapid wage inflation?
higher wages and incomes - rise in demand for imports might stimulate FDI for consumer-facing firms like retailers
56
how might productivity and innovation be affected by rapid wage inflation?
fast forwards drive by chinese producers to raise total factor productivity by investing in human capital and technology to lift ouput per worker
57
give a key statistic that shows income inequality in china
average wealth per citizen - $17,126 median wealth - $6,327
58
what can structural change lead to?
occupational immobility of labour
59
what is countervailing power?
power of a monopsony power and monopoly union will balance out
60
where does the uk have skills shortages?
construction, engineering and teaching
61
what does the demand for labour show?
how many workers an employer is willing and able to hire at a given wage rate in a given time period
62
what is the relationship between the demand for labour and the wage rate?
inverse wage rate is high - more costly to hire extra employees
63
what is derived demand?
demand depends on demand for products they produce labour
64
summarise key factors affecting labour supply
real wage rate on offer in industry overtime substitute occupations barriers to entry improvements in occupational immobility of labour non-monetary characteristics of specific jobs net migration of labour
65
how does the real wage rate in industry affect labour supply?
higher wages raise the prospect of increased factor rewards and should boost the no of people willing and able to work
66
how does overtime affect the labour supply?
opportunities to boost earnings come through overtime payments, productivity-related pay schemes
67
how do substitute occupations affect labour supply?
real wage rate on offer in competing jobs affects wage and earnings
68
how does barriers to entry affect labour supply?
artificial limits to industry's labour supply can restrict labour supply and force pay levels higher
69
how do improvements in occupational immobility of labour affect labour supply?
more people trained with necessary skills required to work in a particular occupation
70
how do non-monetary characteristics of specific jobs affect labour supply?
better working conditions etc will incentivise more people to make different jobs
71
how does net migration of labour affect labour supply?
more migration - more workers to fill skills shortages etc
72
what are some of the key factors that affect the wage elasticity of labour?
nature of skills and qualifications required to work in an industry specific skills and educational requirements make supply inelastic training periods make labour inelastic vocational nature of work - less elastic
73
what is a minimum wage?
where a minimum wage is set, nobody can legally be paid a lower wage rate
74
why do govts set minimum wages?
to reduce poverty and to reduce uneven power in the labour market where large employers have monopsony power
75
what are the advantages of minimum wage rates?
can lift out of poverty as wage earners in poor households benefit knockon effect for informal workers as wages across economy pulled up higher incomes - higher spending - higher economic growth
76
what are the disadvantages of minimum wage rates?
can lead to classical unemployment if wage rate is set above workers productivity many of lowest paid in informal economy so little impact higher costs - expots less competitive - reduced demand - less employmetn
77
why is equity justification a case for higher minimum wage?
every job should be given fair pay linked with skills and experience of an employee
78
why does poverty reduction justify a case for a minimum wage?
minimum wage boosts take-home pay of thousands of lower paid workers
79
how can training justify a higher minimum wage?
encourages firms to up-skill their workers and can lead to higher labour productivity
80
how can incentives justify a higher minimum wage?
improve incentives for people to look for paid work rather than stay on benefits
81
how does anti-discrimination justify a higher minimum wage?
a way of tackling discrimination of low paid female/younger workers
82
why does unemployment provide an argument against the NMW?
higher minimum wage adds to the cost of employing workers and may cause higher unemployment
83
why do small businesses provide an argument against a rise in the NMW?
many smaller businesses struggle to make a profit
84
why does training argues against a rise in NMW?
better incentives for training than a minimum wage - tax relief on apprenticeships
85
further evaluation points for NMW
living wage instead Income Tax Reforms - boost work incentives Benefit reforms - linking benefits to participation on work programmes raising labour productivity
86
NMW evaluation - it depends on
PED of firm's products state of economy higher min wage motivates workers to improve productivity depends on magnitude of change and time scale

Edexcel B A Level Economics (22 decks)

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