Evaluate the factors that might influence the supply of labour in an occupation of your choice. (NHS))

Question 1

Define Supply of labour

Answer 1

The total quantity of labour workers are willing and able to supply at a given wage time and given moment in time

Question 2

KAA1 - Wages

Answer 2

Low wage competitiveness-shortage of labour supply

Qualified Doctors/Nurses may not be willing to work as they feel underpaid

Difficult to argue for pay rise as the NHS is govt owned

Labour shortages as wage increases do not align with the increase in the cost of living

Reduced incentive to work for the NHS-doctors/nurses go more for the private sector (higher wages)

LEFTWARDS SHIFT IN THE LABOUR SUPPLY CURVE

Question 3

Eval 1 - WAGE ELASTICITY OF LABOUR SUPPLY

Answer 3

WELS=How responsive Labour supply is to a change in wage rates

High skills required in the healthcare industry due to high levels of training-relatively inelastic WELS

They have to wait for workers who are fully qualified and trained-shortages could be filled up in the LONG RUN

When workers do get the jobs, it’s unlikely that they’ll switch industries even if wages decrease

Question 4

KAA2 - Market failure in the labour market

Answer 4

Another factor that affects the supply of labour is market failure in the labour market

Occupational mobility of labour=when workers lack the transferable skills and can’t easily switch jobs into another industry

Geographical immobility of labour=when workers are unable to easily change location in search of work or switching jobs
Immigration laws,language barriers and high cost of property: workers from the EU now have VISA issues due to stricter VISA laws leads to geographical immobility

Labour immobility leads to workers becoming more inelastic even though there may be a more lucrative job opening due to lack of skills or funds for relocation (Having to move to other NHS hospitals)
Foreign workers who are wish to become nurses and doctors may lack the necessary skills and experience they require to thrive in the UK

APPLICATION: BREXITTTTTTTTTTTT

This leads to a reduction in labour supply

Question 5

EVAL2 - Govt intervention to fix immobility

Answer 5

Govt can correct labour immobility that is causing market failure in the NHS labour market

Investment into more NHS training and education for new foreigners doctors and nurses helps improve the productive capacity of the workforce

Transport infrastructure development (HS2) allows for more workers to work in major cities such as London and Manchester in search of work
Also subsidising housing costs to reduce the cost of moving houses in search of new work
Easing VISA laws to allow more foreigners to move to the UK to improve the supply of nurses and doctors and more assistance with the moving process from the EU

The UK govt could also increase the retirement age for NHS doctors/nurses to increase the labour supply of older workers (who were originally economically inactive) who may be productive enough to significantly contribute to the NHS

Question 6

JUDGEMENT

Answer 6

Overall, I believe that government intervention will definitely help reduce labour market failure. However, waiting until the long run to attract highly skilled doctors and nurses is an impractical assumption that doesn’t prevent short run labour shortages caused by wage differentials between private and public sector healthcare workers.