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Home Theory of supply Backward Bending Supply Curve of Labor

 

Backward Bending Supply Curve of Labor:

 

Definition:

 

"Wages can increase to a point where less labor is offered in the market".

 

Explanation:

 

We have stated earlier those supply curves are positively sloped. There can be sometime exceptions to the rule there is a backward bending supply curve of labor as is illustrated in the following schedule and a diagram.

 

Schedule:

 

             Wage Rate (in Dollars)

               Working Hour (per day)

10 10
20 12
30 13
50 10

 

Diagram/Figure:

 

 

In the figure (5.4), a labor is willing to work for 10 hours a day at a wage rate of $10 per hour. When the wage rate increases to $30 per hour, he puts in 13 hours of work. If wage rise to $50, he then prefers leisure to work and is willing to work for 10 hours only. The supply curve SS/ shows that a worker puts in less labor when wage rate rises above $30 per hour. The supply of labor then is negatively slopped and is backward bending.

 

The reasons of the backward bending supply curve of labor are:

 

(i) The substitution of leisure for work.

 

(ii) Increase in income which leads to rise in demand of normal commodities including leisure.

Relevant Articles:

Meanings of Supply
Law of Supply
Difference Between Shift in Supply Curve and Movement
Determinants of Supply
Backward Bending Supply Curve of Labor
 

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