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Labour elasticity of supply


Labour elasticity of supply 

%ΔQuantity of labour supplied/%ΔWages

Labour elasticity of supply (LES) is the responsiveness of the labour supply to changes in wages in a particular industry. 


LES depends on:

 The nature of work/vocation 
The way people view the job and the satisfaction they get out of the work also determines the elasticity. In vocational jobs such as nursing, people are less sensitive to changes in wages as they are more focussed on the work than the money. 

 How prevalent the skills/qualifications needed are in the population
If the skills are common, such as in retail (e.g sales assistant), then the LES is relatively elastic, as if the wages go up, more people will immediately want the job. If the skills are less common and wages increase, supply won't immediately increase, so the LES is inelastic. For example, if wages increased by 100% for Premier League footballers, there wouldn't be a massive increase in supply as it is very hard to become a footballer, as it takes a lot of skill. 

 Time horizon 
Within a short time period, the LES will tend to be inelastic as it takes time for the supply in an industry to increase - people need to get the qualifications needed, etc. In the long run, LES is more elastic. 

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