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Unlock This CourseImagine a car factory closes in a small town. Some of the workers find a new job quickly. Others stay unemployed for a long time. A big reason is how easily each worker can move: into a different type of job, or to a different place. Economists call this the mobility of labour.
Key terms:
Mobility is never perfect. The easier it is for workers to move, the more mobile labour is. The harder it is, the more immobile labour is.
Occupational mobility goes up when it becomes easier to switch to a different type of job. It goes down when it becomes harder.
A worker with more education and training has more skills to offer, so they can move into more kinds of work. A bus driver who gains a qualification in logistics can apply for office jobs. Cuts to training courses make mobility fall.
A worker cannot apply for a job they do not know exists. Job websites, careers advice and adverts in local newspapers raise mobility. Poor information keeps workers in the jobs they already have.
Some jobs, such as teacher or nurse, need a certificate. If employers will not accept a worker's old qualification, the worker is stuck. Accepting qualifications from different places makes it easier to change job.
A government may pay for retraining courses, run job centres or give grants to people starting new careers. All of these raise occupational mobility.
Geographical mobility is about moving to where the work is. Several things make it easier or harder.
If houses are very expensive or rents are high in the place with the jobs, workers cannot afford to move there. Cheaper housing raises geographical mobility.
Workers with children in school, or elderly parents to look after, are less willing to move. Workers with no such ties find it easier.
Moving to another country is much harder if the worker cannot speak the language used at work. Learning the language raises mobility.
Information about jobs and government help also affect geographical mobility. A worker is more likely to move if they know about a job in another region. A government might offer help with the costs of moving, or build cheap housing where jobs are growing. Qualifications recognition matters too, especially for moving between countries.
Training, education and qualifications recognition mostly change occupational mobility. Housing costs, family ties and language mostly change geographical mobility. Information about jobs and government help can change both.
When mobility rises, the labour market works better. When it falls, problems appear. Here are the four consequences to know.
Made-up country: Calderia. A coal mining town in the north loses its mine, and 800 miners lose their jobs. Meanwhile a new solar panel factory in the south cannot fill 500 vacancies. The miners have only mining skills, and houses in the south cost three times as much as in the north. Occupational mobility is low because the miners lack skills for factory work. Geographical mobility is low because of the cost of housing. As a result, unemployment stays high in the north, the factory struggles to recruit, and the factory may raise wages to attract staff. If the government paid for retraining and housing grants, mobility would rise and both problems would ease.
1. Mixing up the two types: moving to another town is geographical mobility, changing from farm work to office work is occupational mobility. 2. Saying only that mobility is "good" or "bad". Always give the cause and the consequence. 3. Forgetting that higher mobility can lower wages in the place where workers arrive. 4. Only listing causes without saying how they change mobility, or what that does to unemployment or wages.
Context: In the made-up country of Tavora, many farm jobs have disappeared because of new machines. New jobs are being created in the capital city, but housing there is very expensive and many farm workers do not have the skills for city jobs.
(a) Define geographical mobility of labour. [2 marks]
(b) Explain two causes of low geographical mobility among Tavora's farm workers. [4 marks]
(c) Analyse how an increase in occupational mobility could affect unemployment and wages in Tavora. [6 marks]
(a) Geographical mobility is the ease with which workers can move to work in another place (1), for example from a farming region to a city (1).
(b) One cause is the cost of housing (1): housing in the capital is very expensive, so farm workers cannot afford to move there (1). A second cause is family ties (1): workers with children at school or relatives to care for in the countryside may not want to move (1).
(c) Higher occupational mobility means farm workers can change to different types of job (1), for example after training in new skills (1). More of them could fill the new city jobs, so unemployment would fall (1) because workers would spend less time unemployed (1). More workers move into the city jobs, so the supply of labour there rises (1) and wages are lower than they would have been (1).
In a six-mark "Analyse" question, link each point in a chain: the cause (more training), what it changes (more workers able to change job), and the result (lower unemployment, different wages).