Factors Affecting Choice of Occupation (Cambridge International IGCSE Economics)
Exam board Cambridge International · IGCSEUpdated 2025-03-31
Wage Factors
Spec point —
3.3.1· factors affecting an individual’s choice of occupation
- The occupational choices of workers are influenced by a range of wage and non-wage factors, which are often held in balance when making decisions about where to work
- Wage factors are financial payments that workers receive for their labour
- Non-wage factors incorporate a range of influences that are meaningful to a worker
A Summary of Wage Factors That Influence Occupational Choices
| Factor | Explanation |
|---|---|
| Wages | - An agreed amount of money/hour and is calculated directly from the number of hours worked - E.g. If a student works in a restaurant for 6 hours, 5 days a week and she gets paid $10/hour, her weekly wage is $300 (6x5x$10) |
| Salary | - Employment contracts often state the agreed annual salary the employee will receive - This is then divided by 12 and paid monthly(in the USA it is divided by 24 and paid every 2 weeks) - The hours worked monthly may vary but the pay received is always the same |
| Commission | - Often used as payment to sales people - It is typically a percentage of the value of the transaction involved, e.g. estate agents receive 3-7% of the selling price of any property they sell - This can motivate employees to maximise sales |
| Bonus | - Money paid in addition to a salary and is usually single annual payment - Often paid when the company earns high levels of profits, or as a reward for exceptional worker performance |
| Piece rate pay | - A fixed amount paid to the employee for each completed item produced, e.g. 25 Rupees paid to workers in India for each pair of socks they produce |
| Performance related pay (PRP) | - Payment based on how well the worker performs - Workers doing exactly the same job may receive different compensation based on different outcomes they achieve |
| Share options | - Payment through the issuing of shares in the company the employee works for - This is usually in addition to a monthly salary - The monetary value of the shares provided to the employee can be calculated on any given day as: number of shares x share price |
Non-wage Factors
Spec point —
3.3.1· factors affecting an individual’s choice of occupation
- Many different non-wage factors influence a workers choice of occupation
- Fringe benefits: Benefits provided in addition to a normal salary - such as childcare, free lunches, gym membership, or a company car - can be significant in influencing a person's choice of occupation
- Length of training or level of education required: The longer the time period required to study/train for a job, the fewer the number of people who seek employment in that occupation, e.g. it usually takes seven years to become a lawyer
- Job security: Employment contracts in different industries have different time periods attached to them. Some contracts are one to four years in length, and enjoying work is a significant part of generating job satisfaction. Workers will often change their jobs/careers so as to improve their job satisfaction
- Career prospects: Jobs with a defined pathway for promotion (and salary increases) are often more desirable
- Level of challenge: Many workers step into an occupation due to the challenge of the role, e.g. firefighters
- Status: Some jobs carry a higher recognition in society which workers find appealing, for example doctors, surgeons and lawyers
Exam Hint This is a popular topic in Paper 2 structured questions. Questions can range from 2 mark 'define' questions (define wages) to 8 mark 'discuss' questions (Discuss whether an increase in wages will attract more people to work in a specific industry).
To answer the discussed questions, develop a two-sided argument:
- On the one hand, yes it will attract more workers because...
- However, on the other hand it may not because of the non wage factors (explain them)
If you look at both possibilities, then you have developed a balanced argument.
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