Global Labour Markets | Edexcel A-Level Economics B (9EB0)
Global Labour Markets
- 84 questions
- 6 subtopics
- Theme 3: the global economy
- Paper 2 and Paper 3
Global Labour Markets is examined in Paper 2, Competing in the global economy, and in Paper 3, The economic environment and business.
It covers growth of the global labour force and structural change, the demand for and supply of labour, skills, training and education, global competition, recession and redundancies, trade unions and professional bodies and minimum wage legislation, skill shortages and migration.
Sample questions from Global Labour Markets
Answer each one closed book first, then open the answer.
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Growth of the global labour force and structural change
Why does an ageing population slow the growth of a country's labour force?
Show the answer
More workers reach retirement than young people enter employment, so the working-age share of the population falls and the dependency ratio rises. -
Growth of the global labour force and structural change
Why does structural change cause unemployment even when the total number of jobs is unchanged?
Show the answer
Workers released by declining industries often lack the skills the growing industries need and live far from where the new jobs are, so occupational and geographical immobility leaves them unemployed. -
The demand for and supply of labour
An extra worker adds 40 units a week to output and each unit sells for £6. Should the firm hire at a weekly wage of £220?
Show the answer
The marginal revenue product is 40 × £6 = £240 a week, which exceeds the £220 wage, so hiring adds £20 a week to profit and the firm should hire. -
The demand for and supply of labour
In a competitive labour market, what happens to the equilibrium wage and employment when demand for the industry's product rises?
Show the answer
The labour demand curve shifts to the right, so both the equilibrium wage and the number employed rise. -
Skills, training and education
On a diagram of marginal private and marginal social benefit, where does the under-provision of training appear?
Show the answer
The market settles where marginal private benefit meets marginal cost, to the left of the social optimum where marginal social benefit meets marginal cost, and the welfare loss is the triangle between the two points. -
Skills, training and education
What is a skills mismatch?
Show the answer
A skills mismatch exists when the skills workers have do not match those employers need, so unfilled vacancies and unemployment coexist. -
Global competition, recession and redundancies
Distinguish offshoring from outsourcing.
Show the answer
Offshoring is moving an activity to another country, while outsourcing is contracting it to another firm; an activity can be either, both or neither. -
Global competition, recession and redundancies
Define labour hoarding.
Show the answer
Labour hoarding is keeping workers on through a downturn even though they are not fully occupied, in order to avoid redundancy and later rehiring costs.
The 6 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Growth of the global labour force and structural change | The global labour force and why it has grown, female participation and the participation rate, low-skilled labour supply and wages in developed economies, ageing populations and the dependency ratio, structural change and deindustrialisation, structural unemployment, automation of middle-skill jobs, and interdependent labour markets through trade and offshoring. | 15 |
| The demand for and supply of labour | Labour as a derived demand and its determinants, the price of capital, the marginal revenue product of labour and the hiring decision, the supply of labour to an occupation and its elasticity, net advantages, wage differentials, equilibrium wages after shifts in demand and migration, monopsony employers, slow-clearing labour markets, and regional pay. | 15 |
| Skills, training and education | Education and potential output, general against firm-specific training, underinvestment in general training and its positive externalities on a diagram, government training policies, training length and labour supply elasticity, the return to education, skills mismatches, judging whether a training course is worthwhile, lifelong learning, and education quality and foreign investment. | 12 |
| Global competition, recession and redundancies | Global competition and wages in high-wage economies, unit labour cost and calculating it, competing with high hourly wages, offshoring against outsourcing, cyclical unemployment and overseas recessions, cutting hours before redundancies, labour hoarding, the wider costs of redundancy, hysteresis, and depreciation to protect export jobs. | 12 |
| Trade unions and professional bodies | Trade unions and collective bargaining, raising wages in competitive and monopsony labour markets, bilateral monopoly, sources of bargaining power, falling membership and globalisation, professional bodies and entry requirements, the benefits and costs of professional licensing, and calculating the cost effect of a union pay rise. | 12 |
| Minimum wage legislation, skill shortages and migration | The national minimum wage and where it binds, its effects in competitive and monopsony labour markets, why job losses may not follow, minimum wages in developing countries and informal sectors, inequality, calculating a pay rise, skill shortages and their costs and remedies, internal and international migration, remittances, brain drain, and inequality as an incentive. | 18 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel A-Level Economics B Active Recall Guide
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