The Mobility of Labour

Occupational and geographical mobility

Occupational and geographical mobility

• Labour is often one of the most expensive costs of production

  • If firms can substitute capital (machinery) for labour, productivity often increases and costs decrease

• Labour mobility refers to the ease with which workers can move between jobs, occupations, or geographical areas

• Many firms rely heavily on labour and ensuring labour mobility helps to lower unemployment and reduce worker shortages in an economy

  • For example, high labour mobility in the European Union allows workers from Spain to move to Germany for employment without visa restrictions

Occupational mobility

• This refers to the ability of a worker to change occupations when they lose a job (e.g., from teacher to sales manager), often influenced by transferable skills, training, and qualifications

• If their skill base is transferable between different occupations, then their occupational mobility is high

• In reality, many workers are not able to easily transfer between occupations, and this is a particular issue when an economy is faced with structural unemployment

Geographical mobility

• This refers to the ability to move location for work (e.g. from one city or country to another), influenced by housing availability, family ties, language and migration policies

• Barriers to mobility may include family ties, lack of information about possible jobs in different parts of the country, and the challenges in securing/affording accommodation in an unknown location