Labour Immobility - A-Level Economics

Labour Immobility
Definitions

Labour Mobility refers to the ability of workers to change from one job to another, both
geographically (work in a different location) and occupationally (work in a different field).

Structural Unemployment occurs when there is a mismatch of skills and location between job
seekers and job providers. This tends to occur when the economy undergoes transition, for
example from manufacturing to services.

Geographical Immobility

Geographical immobility refers to the inability of labour to move from one area to another to
find work.

Geographical immobility is caused by several factors, including:

 Social Ties-‐ workers do not want to move away from family and friends.

 Moving House-‐ moving house is costly and a lot of hassle

Cost of Living-workers might be detracted from moving due to high living costs in the
destination. House prices therefore play an important role.

Occupational Immobility

Occupational immobility refers to the inability of labour to move from one type of job to
another. Occupational immobility is caused by insufficient education, skills and training.

Government Strategies

There are several government strategies to increase labour mobility:

Increasing Geographical Mobility

 Relaxation of building laws-‐ this increases the availability of houses, and also lowers prices.

 Increasing construction of social housing-‐ council flats tend to be more affordable for migrants.

 Housing subsidies-‐ the government offers subsidies to Key Workers (e.g. nurses and teachers).
These subsidies include mortgage relief and relocation grants.
Evaluation: Even though these schemes reduce costs of moving, the hassle of moving will still
deter many people. Moreover, there will still be a high cost, even after government subsides and
grants, whilst social ties also discourage people moving to find work.

Increasing Occupational Mobility

 Increasing provision of training schemes, especially for the unemployed. This might include subsidies
to private sector companies to offer training services.

 Increasing the provision of higher education, such as university. This is done by increasing access to
student loans and limiting tuition fees.

Evaluation: Providing training programmes is beneficial, but many people cannot afford to
spend their time in training rather than in work, so it is difficult to get people to take the courses.

What is labour immobility?

Labour immobility refers to the difficulty of workers to move from one location to another,
or from one occupation to another.
→ What are the causes of labour immobility?
Some causes of labour immobility include geographical barriers, lack of education or skills,
language barriers, cultural differences, and personal circumstances like family ties.
→ What is the impact of labour immobility on the economy?
Labour immobility can have a negative impact on the economy as it can result in labor
market inefficiencies, wage disparities, and reduced economic growth.
→ How does government policy affect labour mobility?
Government policies can either facilitate or hinder labour mobility. Policies that support
education and training programs, as well as those that reduce geographic barriers and
promote labour market flexibility, can enhance labour mobility.
→ What are some examples of labour mobility barriers?
Examples of labour mobility barriers include visa restrictions, high moving costs, language
barriers, discrimination, and lack of recognition of qualifications.
→ What are some solutions to labour mobility barriers?
Solutions to labour mobility barriers include improving education and training programs,
reducing visa restrictions, promoting language training, and improving the recognition of
qualifications.
→ How does labour immobility affect wages?
Labour immobility can lead to wage disparities, as workers who are unable to move to areas
with higher wages may be paid less than workers in more mobile occupations.
→ How does labour mobility affect the distribution of labour?
Labour mobility can lead to a more efficient distribution of labour, as workers are able to
move to areas where their skills are in demand.
→ What is the relationship between labour mobility and economic growth?
Labour mobility can enhance economic growth by improving the allocation of labour and
promoting the development of new industries and technologies.
→ How does labour immobility affect unemployment?
Labour immobility can contribute to higher unemployment rates in regions where jobs are
scarce, as workers are unable to move to areas with more employment opportunities.