The supply of labour is determined by wage and non-wage factors that influence how many people are willing and able to work.

Wage factors:

• Wage rate: Generally, higher wages encourage more people to work as the reward for their time increases.

Non-wage factors:

• Population size and demographics: A larger working-age population naturally increases the available labour supply.
• Participation rate: This refers to the percentage of the working-age population who are either employed or actively looking for work.
• Education and training: Access to training enables workers to gain the skills needed for specific jobs, increasing supply in those areas.
• Barriers to entry: Requirements like professional licenses, certifications, or union rules can limit the number of people who can enter certain professions.
• Geographical mobility: The ability of workers to relocate to areas where job opportunities are available.
• Immigration: The inflow of foreign workers can significantly boost the size of the labour force.
• Social and cultural norms: Societal expectations, such as caring responsibilities or views on retirement, influence whether people choose to participate in the labour market.

These factors can cause the overall supply of labour to change, regardless of the current wage rate.