Syllabus: AQA - GCSE Economics
Module: 3.1.5 Competitive and Concentrated Markets
Lesson: 3.1.5.4 The Labour Market

Introduction

The AQA GCSE Economics syllabus section 3.1.5.4 The Labour Market sits within the broader topic of Competitive and Concentrated Markets. This module introduces students to how labour is allocated, how wages are determined, and how various market factors influence employment decisions. The topic is central to understanding both microeconomic behaviour and real-world workforce trends.

Aligned to the AQA GCSE Economics Specification (8136), this section supports teachers in meeting Gatsby Benchmark 4 by linking core economic theory to real career considerations. It also supports wider commercial awareness objectives by helping students grasp how they will eventually participate in labour markets themselves.

Key Concepts

According to the official AQA syllabus, students should be able to:

• Understand the role and function of the labour market, including the interaction of workers and employers.

• Describe how wages are determined through the interaction of demand and supply.

• Identify the factors that influence demand for labour (e.g. productivity, demand for final product) and supply of labour (e.g. working conditions, wage levels, skills, and mobility).

• Understand how government intervention can affect the labour market, including the impact of the National Minimum Wage and employment laws.

In addition, students should be encouraged to analyse how the labour market can differ across sectors and how it contributes to overall economic performance.

Real-World Relevance

This topic gives students the opportunity to explore live debates around minimum wage policies, employment trends, and gig economy dynamics.

Example 1: National Living Wage Adjustments
In April 2025, the UK government increased the National Living Wage to £11.44 per hour for workers aged 21 and over. This change had direct implications for labour costs in retail and hospitality, sectors heavily reliant on lower-wage employment. Students can explore how this affects demand for labour and potentially leads to increased automation or changes in recruitment practices.

Example 2: Labour Shortages in Healthcare
The persistent shortage of NHS staff highlights the importance of non-wage factors in labour supply—such as job conditions, training requirements, and geographical mobility. This case supports critical discussion around supply constraints even in high-demand sectors.

How It’s Assessed

The AQA GCSE Economics exam includes both Paper 1 (How markets work) and Paper 2 (How the economy works). This topic falls under Paper 1 and is typically assessed through:

• Multiple choice questions testing definitions and applied understanding

• Data response questions involving interpretation of employment statistics, wage levels, or case studies

• Extended writing questions (6-9 marks) requiring application, analysis, and evaluation

Common command words:

• Explain – to show understanding of relationships or causes

• Analyse – to break down and interpret data or economic behaviour

• Evaluate – to weigh up arguments or policies, often involving government intervention

Teachers should guide students in structuring responses using chains of reasoning and ensuring they directly address the context provided.

Enterprise Skills Integration

This topic offers natural links to several key enterprise skills central to commercial awareness and career readiness:

• Decision-making: Students can consider how employers decide wage offers or hiring strategies in response to market changes.

• Problem-solving: Analysis of real labour market issues (e.g. staff shortages, rising wage demands) encourages critical thinking.

• Data interpretation: Wages, employment rates, and productivity figures provide ideal material for economic data analysis.

Activities such as mock wage negotiations, labour market simulations, or employer case studies from Skills Hub Futures help embed these competencies in a meaningful way.

Careers Links

The labour market is a direct bridge to career learning. Exploring how labour is bought and sold enables students to:

• Understand how their own skills and attributes affect employability

• See the relevance of pay, training, and job conditions across sectors

• Reflect on real employer expectations and workforce trends

Mapped to Gatsby Benchmarks 4, 5, and 6, this topic connects curriculum learning to careers by:

• Including real employer scenarios from sectors like healthcare, logistics, and retail

• Supporting simulated workplace decisions that mirror wage setting and staffing challenges

• Helping students explore how labour market conditions influence job security, career progression, and even geographic mobility

Teaching Notes

Common Misconceptions

• Students often think wages are set by employers alone, not understanding the role of supply and demand.

• They may struggle to see why someone would choose a lower-paid job, missing factors like flexibility, purpose, or training opportunities.

Recommended Teaching Strategies

• Use live labour market data from the Office for National Statistics to bring the topic to life.

• Incorporate role play activities simulating job interviews, wage negotiation, or recruitment decisions.

• Link to the Careers Education programme, especially around job market research.

Extension Opportunities

• Ask students to compare labour markets across countries, using minimum wage data and employment legislation.

• Debate the ethical and economic impacts of zero-hour contracts and gig economy roles.

Assessment Preparation

• Encourage use of PEEL paragraphs (Point, Evidence, Explain, Link) in longer written answers.

• Revisit key graphs such as labour supply and demand curves regularly using varied contexts.