Labour Mobility
Definition
Geographical mobility: the ease with which workers move between different locations or regions to take up work.
Occupational mobility: the ease with which workers move between different jobs, occupations or industries.
- Labour mobility is how easily workers move between jobs and locations, which decides how quickly the labour market clears.
- When mobility is low, vacancies in growing areas stay unfilled while workers elsewhere remain jobless, so unemployment and wage gaps persist.
- Raising mobility is therefore central to cutting structural unemployment and improving allocative efficiency.
Key Idea
- Immobile labour is a source of labour market failure because supply cannot respond to where demand is.
- The result is structural unemployment alongside unfilled vacancies and persistent regional wage gaps.
The Two Forms of Immobility
- Geographical immobility: high house prices, family ties and differing living costs stop workers relocating to where jobs are, so vacancies there stay unfilled.
- Occupational immobility: workers made redundant in a declining industry lack the skills or qualifications new jobs demand, so they cannot switch even when nearby vacancies exist.
- Both leave the market in disequilibrium: unemployment and vacancies rise together, the tell-tale sign of a structural mismatch.
Example
- A worker in a former steel town cannot take a £35,000 job in a city 200 miles away because a comparable home there costs £250,000 more.
- A redundant 55 year-old machine operator is rejected for coding roles because retraining would take two years he cannot afford unpaid.
Factors Affecting Mobility
- Skills and training: the wider the gap between a worker's skills and those employers demand, the lower occupational mobility, so retraining that narrows the gap raises it.
- Housing and relocation costs: large regional gaps in house prices and rents cut geographical mobility, while relocation grants and affordable housing raise it.
- Personal and institutional factors: family ties, age, the benefits system and income tax all shape whether moving or switching is worthwhile.
Note
- Policies raise mobility only slowly: training and housing schemes cost money now for gains that arrive years later.
- It depends on why workers are immobile: a relocation grant does nothing for a worker who lacks the required skills.
Exam technique
- Separate geographical mobility (moving location) from occupational mobility (changing job).
- Link immobility explicitly to structural unemployment and unfilled vacancies.
- Match each policy to the specific barrier it removes.
- Evaluate with time lags and cost.
Common Mistake
- Do not confuse geographical with occupational immobility.
- One is about where you can work; the other is about what work you can do.
- Do not assume one policy fixes both.
- Housing support raises geographical mobility; training raises occupational mobility.
Self review
- Define geographical and occupational mobility.
- Explain how immobility causes structural unemployment.
- Give two factors that reduce geographical mobility.
- Name one policy for each form of mobility.
- Why might a relocation grant fail to raise mobility?
