What this lesson teaches
I can explain the causes and effects of changes in how easily workers move between jobs and places.
Syllabus K343, 3.3.4. Mobility of labour: causes of changes in the occupational and geographical mobility of labour; consequences of changes in the occupational and geographical mobility of labour
Make a guess
A bank teller loses her job to an app and lacks the skills for a data job. What kind of mobility is low?
- Both are high, because there are jobs available.
- Geographical mobility: she cannot move to another city.
- Occupational mobility: she cannot easily change job type.
Show the answer
Occupational mobility: she cannot easily change job type.
Occupational mobility is about moving between types of work. Without new skills, she cannot move into the growing jobs.
Labour mobility is how easily workers can change jobs (occupational) or move to work elsewhere (geographical).
Occupational mobility is how easily workers can move from one type of job to another. It is low when the new job needs skills the worker does not have. Training courses make it higher.
Geographical mobility is how easily workers can move to a job in another place. It is low when homes in the new area cost a lot, when moving is costly, or when family ties keep people where they are. Better transport and cheaper homes make it higher.
High mobility helps the economy. Workers move from shrinking industries to growing ones. Fewer people are left without work, and output rises.
Low mobility has costs. People stay out of work even when there are jobs elsewhere. Firms struggle to fill their vacancies, and growth slows.
- Occupational mobility
- Ease of changing type of job.
- Geographical mobility
- Ease of moving location for work.
- Benefit of high mobility
- Less structural unemployment; resources move to growing industries.
Worked example: Retraining after automation
Suppose a bank replaces many tellers with digital services.
- Problem: tellers lose their jobs, but their skills do not suit the jobs that are growing, such as data analysis.
- Low occupational mobility: without new skills, they may stay unemployed.
- Policy: subsidised courses, such as those under SkillsFuture, help them retrain.
- Consequence: higher mobility lets them move into growing industries, reducing structural unemployment.
Watch out for this
Geographical mobility is about changing occupation.
Geographical mobility is about changing location for work. Occupational mobility is about changing type of job.
Check your understanding
A government gives grants for adults to retrain in new skills. Which kind of mobility rises?
- Geographical mobility
- Occupational mobility
- Neither, because training only helps firms
Show the answer
Occupational mobility
Right. New skills make it easier to change type of job.
Check your understanding
Which is a barrier to geographical mobility of labour?
- High housing costs where the jobs are
- Low pay in the worker's current job
- Lacking the skills a new job needs
- Long training needed for a new career
Show the answer
High housing costs where the jobs are
Right. Expensive housing makes it hard for workers to move to where the jobs are.