RI 2023 H2 Y6 Timed Practice - Examiner's Report

ECONOMICS Higher 2 Syllabus 9570 Examiner’s Report Year 6 Timed Practice 2023 R a f f l e sI n s t i t u t i o n N u r t u r i n g t h e T h i n k e r , L e a d e r & P i o n e e r TEL: 65 6419 9888 ● FAX: 65 6419 9898 http://www.ri.edu.sg ● One Raffles Institution Lane, SINGAPORE 575954

Y6/9570/TP/2023 2 © RI 2023 [Turn Over ECONOMICS Y6 H2 Timed Practice 2023 Paper 9570/01 Paper 1 Question 1 The Gig Economy (a) With reference to Figure 1, (i) Compare the number of private -hire car drivers and delivery riders in Singapore from 2018 to 2021. [2] • Both the number of private hire car drivers and delivery riders increase over the period . However, the number of private hire drivers was consistently higher than that of delivery drivers over the period. OR • The number of private hire car drivers fell from 2020 to 2021 while the number of delivery drivers increased consistently over the period. Mark Scheme: - Similarities – 1m - Differences – 1m Examiners’ Comments: • Some students did not state a similarity in their comparison while others did not have a comparison for the overall time period from 2018 to 2021. • Students should note the importance of using comparative words to highlight differences. The use of comparative words such as “both”, “while” and “whereas” was missing in many scripts. (ii) With the aid of a diagram, explain one demand and one supply reason for the change in number of platform workers in Singapore from 2018 to 2021. [5] • The number of platform workers (private hire car drivers and delivery riders) generally increased from 2018 to 2021 (as seen from Figure 1). • The increase in demand of platform workers is due to: o Increased demand for app services (from changing taste and preferences ). Technology advancement resulting in development of platform apps lea ds to increase d reliance on these platform services such as food delivery and ride sharing services (Ext 1: the rise of platform apps that allow you to order anything you desire with your phone and increased reliance on these platform services ) → This leads to an increase in (derived) demand for platform workers. • The increase supply of platform workers could be due to: o Increased unemployment level due to the pandemic, e.g. those from travel and tourism industries (Extract 1) → more workers who are now available for work and seeking work are willing and able to join the gig economy as it continued to offer job vacancies d uring the recession (Extract 1 & 2).

Y6/9570/TP/2023 3 © RI 2023 [Turn Over o Non-monetary (wage) incentives such as increased flexibility (Extract 1) of work conditions/ hours→ increase in supply of platform workers willing and able to offer their services at each wage level. o Government policies→ higher job incentives for delivery workers (Ext 1: additional benefits for platform workers such as overtime pay and other legal protections; measures supporting training programmes and bolstering CPF savings of gig workers) → increase in the supply of workers willing and available for work at each wage level. o Technology which reduces the BTE for workers to join the gig economy. Technology helps to reduce barriers for workers to enter the gig economy as lower -skilled workers have greater job mobility/les s mismatch of skills with jobs associated wit h the gig economy → Workers are more willing and able to offer their services to work in the gig economy → increase in supply of platform worker. (Ext 1: delivery workers and private -hire car drivers who use on line platforms to match their services with demand could make thousands a month). • Due to the increase in demand and supply for platform services in the labour market, there will be a rise in the number of platform workers in Singapore/ increase in equilibrium quantity of workers as seen in Figure 1. Assuming that the increase in DD and SS is equal, at P1, equilibrium quantity increases from Q 1 to Q 2, and the equilibrium quantity of platform workers increases . Note: it is equally acceptable to analyse  DD >  SS or DD <  SS. Mark Scheme: - Explanation of one determinant of demand for labour with use of case material – 2m - Explanation of one determinant of supply of labour with use of case evidence – 2m - Accurate diagram showing the labour market changes – 2m Examiners’ Comments: This question was not done well. The gap lies in the general unfamiliarity with the demand and supply determinants in the labour market. Some common mistakes include: • There is a confusion between the market for the final services provided by platform companies and the labour market for the gig workers. The focus of this question is the labour market for gig workers. Figure 1: Market for platform workers Q1 Q2 Quantity of platform workers S1 S2 0 D2 D1 W1 Wage

Y6/9570/TP/2023 4 © RI 2023 [Turn Over • Lack of scope of factors explained: o Some students only utilised the pandemic as the reason for both the increase in supply and demand of labour. However, it is important to note that the pandemic is not s ufficient to explain the entire time period from 2018 to 2021. • Lack of depth of explanation: o There was no use of concepts like derived demand, or labour being a factor of production in providing the services to link the increase in the demand for the services to the demand for platform workers. o There was no link made to the willingness or ability to work to explain why supply of platform workers increased. o A good response should offer a combined effect for the overall change in equilibrium quantity of platform workers. o There was also a missing link from the equilibrium quantity of workers on the diagram to the “number of platform workers”. • Some scripts lacked the use of case evidence to support their explanation while other s merely quoted case evidence without adequately explaining it with use of economic concepts. • Many students drew the demand and supply diagram without clearly stating which market they were referring t o. The diagram drawn should reflect the labour market with wage and quantity of platform workers labelled on the axes. (b) To what extent is the imposition of the minimum wage for gig workers an appropriate policy for Singapore? [8] Introduction • Clarify the aim of government intervention in Singapore’s gig economy is to “ provide more sustained support for lower wage workers” (Extract 3) Thesis: Imposition of a minimum wage for gig workers is an appropriate policy measure • Define: a minimum wage set by the government below which firms are legally prohibited from paying to their workers • Explain how a minimum wage works in the gig economy: o Without a minimum wage policy, the gig workers’ wages are determined by the demand and supply for gig workers as shown in Figure 2

Y6/9570/TP/2023 5 © RI 2023 [Turn Over o For a minimum wage policy to be effective, the Singapore government needs to set it above the prevailing wage level at W1. o For instance, with a minimum wage at Wm, the policy would be appropriate as it effectively raise the wage from W1 to Wm, providing better support for low wage gig workers • Elaborate on how this minimum wage policy may be appropriate in Singapore’s context: o As seen by the survey done in US, “1 in 7 gig workers earned less than the federal minimum wage (Extract 2), Singapore’s gig workers may be similarly facing low and unstable wages, leading to a wide income gap between the gig workers a nd the non -gig workers. In comparison with the world’s other advanced economies, Singapore already has a relatively higher Gini coefficient around 0.45, indicating a high level of income inequality present in our society. Thus, a minimum wage for gig workers would b