Labour supply can be defined as the availability of suitable human resources in a particular labour market. The suitable human resource would be the one not only with the required skills for a particular job but also it must be willing and able to work at the existing wage rate. Labour market is similar to commodity market with the difference of labour (human resource) being demanded and supplied at a particular price (wage).Labour supply 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, The labour supply curve for an industry or occupation will be upward sloping indicating a positive relation between wage and labour supply, increase in wage rate leads to increase in labour supply and vice versa. This is because, as wages rise, other workers enter this industry attracted by the incentive of higher rewards. They may have moved from other occupations or they may not have previously held a job, such as housewives or the unemployed.
Analysis of labour supply requires understanding of the background changes in wages, participation and hours of work and leisure. Factors other than wage that cause a shift in labour supply size of population-larger the population larger labour supply ,social and cultural factors like women’s participation ,working age, labour mobility and labour force participation rate. Elasticity plays a major role in determining wage rates which in turn helps determining to supply of labour, elasticity of supply can be defined as as the percentage change in the quantity of labor supplied divided by the percentage change in the wage. More than 0 but less than 1 we said the elasticity is inelastic, equal to 1 the elasticity is unit elastic, and greater than 1 the elasticity is elastic. Factors affecting elasticity of labour supply are