Labour Mobility: Definition, Merits & Economic Factors

What is Labour Mobility?

Labour mobility or mobility of labour means the ease with which labour can move both geographically and occupationally.

That is, labor mobility refers to the flexibility with which the workforce can relocate. This is an important variable for the economic study since work is one of the factors of production.

Specifically, the mobility of human resources has an impact on the productivity of a country or region (we will explain this in detail later). It should also be noted that globalization, together with the reduction in transport costs in recent decades, has had a significant impact on the mobility of workers between countries, even among those thousands of kilometers apart.

Types of Labor Mobility

There are two main types of labor mobility.

Such movements are of two types:

Geographical Labour Mobility

Geographical labour mobility is the Movement over space i.e. from one area to another e.g. people from New York, Washington DC, etc, moving to California.

Occupational Labour Mobility

Occupational labour mobility can take two different forms,

(a) Horizontal or lateral mobility – This is the movement from one occupation to another such as movement from engineering to sales profession.

(b) Vertical Mobility – This is the upward movement along the professional line by promotion. For example an Accountant becoming a Senior Accountant and later Chief Accountant or Finance director.

Impact of Labor Mobility

Labor mobility impacts mainly on the following fronts:

• Increases the labor supply: Increases the number of available workers. This represents an advantage for companies because they will have a better chance of finding the right workforce for their requirements.
• Possible drop in wages: In some sectors with an excess supply of labor, wages may fall. This is because, in the face of strong competition, workers will be willing to accept lower pay.
• Greater productivity: Continuing with the previous point, by having the possibility of hiring workers with the same qualifications for lower wages, companies can reduce costs and be more efficient.
• Better qualified human resources: By having the possibility of working for foreign companies, employees acquire not only professional experiences, but also cultural exchange experiences that improve their capacities beyond academic knowledge.

We could add more such as the cultural and sociological effects it has, but the above are the most prominent at an economic level.

Factors Affecting Geographical Labour Mobility

Encouraging Factors:

1. Good climate attracts people.
2. Better economic prospects attract job seekers.
3. The friendly attitude of host countries or communities normally attracts strangers.
4. The presence of one’s relatives or friends is a source of attraction to other members of the family.

Discouraging Factors:

1. Unwillingness to part with relations and a familiar environment for an unknown place reduces the scale of movement of people.
2. Long distance and transportation costs discourage people.
3. High cost of living in the proposed place delays movement.
4. Age and other social abilities limit the number of people who can move.
5. Government’s discriminatory employment policy may discourage people who would normally have moved.
6. Religious and other cultural factors may discourage people from movement.
7. Language barrier is a deterrent to movement.
8. Difficult immigration requirements.

Factors Affecting Occupational Mobility of Labour

Encouraging Factors:

1. Significant income differential among various occupations may attract people to high paying jobs.
2. Adequate supply of professional training institutions makes it easier to move from one occupation to another.
3. Job dissatisfaction encourages people to find alternative employment.
4. Poor career guidance may lead to frequent job changes.

Discouraging Factors:

1. Difficult membership conditions required by professional associations make entry into certain professions very difficult.
2. Limited opportunity for professional development hinders labour mobility.
3. Lack of appropriate or market relevant skills makes it difficult for people to change jobs.
4. High cost of required training limits the number of quahfied people for certain jobs.
5. Holders of jobs that are trained and with specific skills find it difficult to change their occupation.
6. Trade unions regulate entry into some professions or occupations.