PRESENTATION ON LABOUR DEMAND & SUPPLY

Submitted by
A. SURESHKUMAR N. SIVALINGAM N. SIVACHELVAN S. SABESAN EU/MDE/10/20 EU/MDE/10/17 EU/MDE/10/16 EU/MDE/10/13

Labour Demand

Introduction

The demand for labour is a derived demand since labour is demanded because of a demand for goods.
Demand for labour is directly affected by the cost of labour and the productivity. Demand for labour related to productivity of labour and the level of demand for the product There is a negative relationship between the demand for labour and the wage rate.

Labour Demand

Demand for Labour Influenced by:

Cost of hiring labour how the productive worker are Wages/salaries National Insurance contributions Pension contributions

Labour Demand
A firms demand curve for Labor Assumption Firms objective is to maximize profit Firm uses a single variable factor Labour Labour Market is perfectly competitive Firm produces single commodity

Derivation of Demand Curve for Labour

Supply of Labour
Introduction

Physical and mental effort to produce goods, services, ideas and techniques.
Labour force consist of the number of its willing to work people

The total supply of labour = total # of hours The labour force willing to work given the reward per time unit

Supply of Labour

Supply of Labour determined by:

Size and structure of the population age, gender, etc. Quality of labour force Education and training Number in higher education School leaving age Qualification types Proportion of population willing to work # of hours which the labour force is willing to work at a given wage rate

Supply of Labour

Derivation of Labour Supply curve Assumption

All labour is homogeneous Labour units are identical Labour finds a trade off between hours of work and income

Derivation of Labour Supply Curve

Market Labour Supply Curve

Wage Determination

THANK YOU