Silver Oak Hospital employs nurses and pays them an hourly wage. Which of the following would cause a movement along the supply curve of labour for nurses at Silver Oak Hospital, rather than a shift of the supply curve?

A2 Economics 9708: Movement vs Shift of the Labour Supply Curve

Step 1: Recall the distinction between a movement and a shift of a labour supply curve

A movement along the supply curve of labour happens only when the wage rate paid for that job changes (workers already willing to consider the job simply supply more (or less) labour at the new wage, at a different point on the same curve. A shift of the supply curve happens when any non-wage determinant of labour supply changes instead) for example non-wage benefits, the attractiveness of alternative occupations, or the qualifications needed to enter the occupation, so that a different quantity of labour is supplied at every wage, not just at one.

Step 2: Check option A

In option A, Silver Oak Hospital changes the wage rate itself, from $25 to $30 per hour. This is exactly the kind of change that produces a movement along the existing supply curve of nurses’ labour, not a shift of it: at the higher wage, more nurses are willing and able to work at Silver Oak, but this is read off the same underlying curve.

Step 3: Rule out options B, C and D

Option B: free on-site childcare is a non-wage benefit of working at Silver Oak. Since it makes nursing there more attractive at every wage, it shifts the supply curve of labour to the right (more nurses willing to work at Silver Oak at any given wage).
Option C: a new private hospital with better career progression changes the attractiveness of an alternative occupation/employer, another non-wage factor. This makes nursing at Silver Oak relatively less attractive, shifting its supply curve to the left (fewer nurses willing to work there at any given wage).
Option D: stricter qualification requirements raise the barriers to entry into nursing itself, a non-wage factor that reduces the number of people able to supply their labour as nurses at all. This shifts the supply curve to the left.

In each of B, C and D, Silver Oak’s own wage rate never changes, only some other factor does, so all three shift the curve rather than producing a movement along it.

Final answer

Option A. Only a change in the wage rate paid by Silver Oak itself causes a movement along the labour supply curve; B, C and D are all shifts caused by non-wage determinants (a fringe benefit, the attractiveness of an alternative employer, and entry qualifications).