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In mainstream economic theories, the labour supply is the total hours (adjusted for intensity of effort) that workers wish to work at a given real wage rate. It is frequently represented graphically by a labour supply curve, which shows hypothetical wage rates plotted vertically and the amount of labour that an individual or group of individuals is willing to supply at that wage rate plotted horizontally. There are three distinct aspects to labor supply or expected hours of work: the fraction of the population who are employed, the average number of hours worked by those that are employed, and the average number of hours worked in the population as a whole.


Neoclassical view

Labour supply curves derive from the 'labour-leisure' trade-off. More hours worked earn higher incomes, but necessitate a cut in the amount of leisure that workers enjoy. Consequently, there are two effects on the amount of labour supplied due to a change in the real wage rate. As, for example, the real wage rate rises, the
opportunity cost In microeconomic theory, the opportunity cost of a particular activity is the value or benefit given up by engaging in that activity, relative to engaging in an alternative activity. More effective it means if you chose one activity (for example ...
of leisure increases. This tends to make workers supply more labour (the "
substitution effect In economics and particularly in consumer choice theory, the substitution effect is one component of the effect of a change in the price of a good upon the amount of that good demanded by a consumer, the other being the income effect. When a ...
"). However, also as the real wage rate rises, workers earn a higher income for a given number of hours. If
leisure Leisure has often been defined as a quality of experience or as free time. Free time is time spent away from business, work, job hunting, domestic chores, and education, as well as necessary activities such as eating and sleeping. Leisure ...
is a
normal good In economics, a normal good is a type of a good which experiences an increase in demand due to an increase in income, unlike inferior goods, for which the opposite is observed. When there is an increase in a person's income, for example due to a ...
—the demand for it increases as income increases—this increase in income tends to make workers supply less labour so they can "spend" the higher income on leisure (the "
income effect The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves. It analyzes how consumers maximize the desirability of their consumption as measured by their pre ...
"). If the substitution effect is stronger than the income effect then the labour supply slopes upward. If, beyond a certain wage rate, the income effect is stronger than the substitution effect, then the labour supply curve bends backward. Individual labor supply curves can be aggregated to derive the total labour supply of an economy.


Marxist view

From a Marxist perspective, a labour supply is a core requirement in a capitalist society. To avoid labour shortage and ensure a labour supply, a large portion of the population must not possess sources of self-provisioning, which would let them be independent—and they must instead, to survive, be compelled to sell their labour for a subsistence wage. In the pre-industrial economies wage labour was generally undertaken only by those with little or no land of their own.


Effects of contraceptive pills on women's labor supply

It is utterly important to know the effects of contraceptive pills on women's labor supply to study further about the Female Labor Supply. Two innovations in the theory of household behavior have broadened the analysis of labor supply in recent years. One is the conceptualization of the labor supply as being linked to decisions about a variety of nonmarket activities such as pregnancy, education, and marriage. The second is to observe wage rates both in the market and in the home as choice variables that are influenced by the behaviors of household members in terms of job search, employment, and investment. The first birth control pill, Enovid was released in 1960. Enovid changed the perspective of women in the workforce. Thanks to the contraceptive pill, women now had more control over family planning, which in turn led to more control and flexibility in terms of choosing occupational and career paths/goals. There is also evidence to support that at all levels of received education, this form of contraception has had long-term and far-reaching implications on Women's labor force participation rates. Historically, empirical research has lacked in the field of oral contraceptives and its impacts on Women and labor force participation. The pill's introduction in 1960 and subsequent widespread use coincided with the revival of the Women's movement at the time. Furthermore,
abortion Abortion is the termination of a pregnancy by removal or expulsion of an embryo or fetus. An abortion that occurs without intervention is known as a miscarriage or "spontaneous abortion"; these occur in approximately 30% to 40% of preg ...
became more widely available around the same time that many young women obtained access to the pill. Evidence suggests that these breakthroughs in Women's sexual health had significant impacts on their fertility and employment/career endeavors. According to ''Katz'' and ''Goldin'', the wider access to contraceptive pills brought about two major economic changes. First, it brought drastic changes in women's educational and career-oriented choices. In earlier years, if a woman wanted to follow her dreams of obtaining a higher education she had to delay her marriage and it came with certain social costs. She would either have to pay a penalty for sexual absenteeism or take a chance that she won't be pregnant and that her investment in he career would not go wasted. This was called the direct effect of the pill. The second was the indirect effect according to ''Katz'' and ''Goldin''. They coined this effect as the social multiplier effect. This had an impact on both men and women. Because men also had now an opportunity to delay the marriage and not pay the huge penalty for it. Now, since everyone got the chance to delay their marriage, it created a great pool of people or better chances of getting married to someone with a better match.


See also


Scientific journals dealing with labour supply

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Journal of Labor Economics A journal, from the Old French ''journal'' (meaning "daily"), may refer to: *Bullet journal, a method of personal organization *Diary, a record of what happened over the course of a day or other period *Daybook, also known as a general journal, a ...
*
Review of Economics of the Household The ''Review of Economics of the Household'' is a peer-reviewed academic journal established in 2001 by Shoshana Grossbard and first published in 2003. It publishes empirical and theoretical research on the economic behavior and decision-making p ...
*
Journal of Human Resources ''The Journal of Human Resources'' is a quarterly peer-reviewed academic journal covering empirical microeconomics. It was established in 1965 and is published by The University of Wisconsin Press. The editor-in-chief is Anna Aizer (Brown Universi ...
*
Journal of Public Economics The ''Journal of Public Economics'' is a monthly peer-reviewed academic journal covering public economics, with particular emphasis on the application of modern economic theory and methods of quantitative analysis. It provides a forum for discussi ...


References


Further reading

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Richard Blundell Sir Richard William Blundell CBE FBA (born 1 May 1952, Shoreham-by-Sea) is a British economist and econometrician. Blundell is the David Ricardo Professor of Political Economy at the Department of Economics of University College London and ...
and Thomas MaCurdy, 2008. "Labour supply," ''
The New Palgrave Dictionary of Economics ''The New Palgrave Dictionary of Economics'' (2018), 3rd ed., is a twenty-volume reference work on economics published by Palgrave Macmillan. It contains around 3,000 entries, including many classic essays from the original Inglis Palgrave Dictio ...
'', 2nd Editio
Abstract.
*
Ellen Meiksins Wood Ellen Meiksins Wood (April 12, 1942 January 14, 2016) was an American-Canadian Marxist political theorist and historian. Biography Wood was born in New York City on April 12, 1942, as Ellen Meiksins one year after her parents, Latvian Jews a ...
(2002)
The Origins of Capitalism: A Longer View
' London: Verso {{DEFAULTSORT:Labour Supply Capitalism Labour economics Workforce