A wage is the price for labor services paid for by the firm and received by the worker. A shift in the labor supply curve refers to a change in the total number of workers willing to provide labor services at various wage levels. Such shifts in the supply curve are caused by non-price factors, such as changes in tastes or attitudes of workers, the degree of immigration, and demographic changes.
When the labor supply shifts, it moves the entire supply curve either to the right (increase) or to the left (decrease). A rightward shift represents more workers willing to work at each wage level, while a leftward shift indicates fewer workers are available at each wage level. A shift in labor supply changes the entire supply curve.
An increase or decrease in the quantity of labor supplied, on the other hand, is a movement along the existing labor supply curve. This occurs due to changes in wage rates, holding all other relevant factors constant.
Changes in tastes or attitudes among the workers can lead to a shift in the supply of labor. For example, the participation of women in the labor force has increased substantially over the past several decades due to shifting attitudes toward women working outside the home. This expands the labor force in the economy and shifts the labor supply curve to the right.
Immigration and emigration significantly impact the labor supply increasing or decreasing the number of available workers, respectively. When immigrants enter the labor market, they add to the overall labor force, shifting the labor supply curve to the right. Conversely, when emigrants leave the country, the labor supply curve shifts to the left.
Population growth also affects labor supply by increasing the number of individuals available to work,leading to a rightward shift in the labor supply curve. As more people reach working age, the overall labor force grows, meaning more workers are willing to work at various wage levels.
From Chapter 13:
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