Understanding Geographical Labor Mobility
Geographical labor mobility measures how easily workers can relocate within a nation or region to find employment suited to their skills. Higher labor mobility is often linked with greater overall productivity in an economy.
Key Takeaways
- Various factors such as transportation options, living standards, and government policies determine workers’ mobility.
- The geographical labor mobility rate within the United States has been declining since the 1980s.
- Increased labor mobility usually correlates with higher productivity and economic performance.
Drivers and Barriers to Mobility
Geographical labor mobility reflects the ease or difficulty workers encounter when relocating for better job opportunities. Factors determining this mobility include physical, geographic, and political barriers. At a personal level, family situations, housing availability, local infrastructure, and educational resources also play vital roles.
On a broader scale, the level of trade and industrial activities profoundly influences geographical labor mobility. Greater domestic and international trade creates diverse job opportunities across multiple locations.
What Is Occupational Labor Mobility?
Occupational labor mobility refers to the ease with which workers can change jobs or professions without the need to relocate.
Factors Influencing Geographic Mobility
- Education Levels: Higher education generally increases the likelihood of relocation for better job opportunities.
- Personal and Cultural Attitudes: Strong attachment to a particular place can impede relocation.
- Industrialization: More developed economies offer numerous blue-collar job opportunities, enhancing labor mobility from rural to urban areas.
- Government Policies: Policies that support transportation, improve living standards, and address relocation challenges effectively increase labor mobility.
The Impact of Non-Compete Clauses
Non-compete clauses prevent senior employees from founding new businesses and can inhibit overall labor mobility. In April 2024, the Federal Trade Commission issued a rule banning non-compete clauses, scheduled to take effect in September 2024.
Pros and Cons of Geographic Labor Mobility
Benefits of Mobility
Greater labor mobility leads to better labor distribution and increased productivity. According to economic studies, labor mobility helps in managing macroeconomic stability and makes economic policies more effective.
Drawbacks of Mobility
Despite its benefits, increased labor mobility can weaken local communities and erode social capital. Moreover, it can cause brain drain, moving valuable human capital from developing regions to developed ones.
A Historical Perspective in the U.S.
Historically, the U.S. has seen periods of peak labor mobility, particularly during westward expansion and the industrial boom. However, since the 1980s, geographic labor mobility has declined, a trend that continued even during the coronavirus pandemic.
In 2021, only 8.4% of Americans lived in a different residence compared to 9.3% in 2020.
Why Is Labor Mobility Important?
Higher labor mobility is generally considered beneficial for the economy. It often leads to increased productivity, job satisfaction, reduced unemployment, and higher GDP.
Cross-Border Labor Mobility: A Controversial Issue
Geographic mobility across national borders has both supporters and opponents. While some argue that migrant workers contribute to economic growth by taking low-paying jobs, others believe they undercut local wage standards, leading to overpopulation and straining public services.
The Bottom Line
Geographic labor mobility is a valuable indicator of an economy’s health. A workforce that can freely relocate tends to be more productive and economically stable. Businesses benefit from a wider talent pool, boosting their chances of success.
Related Terms: occupational labor mobility, standard of living, infrastructure, industrialization, non-compete clauses, brain drain.
References
- European Commission. “Annual Report on Intra-EU Labour Mobility 2020”.
- Federal Trade Commission. “FTC Announces Rule Banning Noncompetes.”
- The Yale Law Journal. “Stuck! The Law and Economics of Residential Stagnation”.
- Thomas Faist. The transnationalized social question: Migration and the politics of social inequalities in the twenty-first century. Oxford University Press, 2018.
- Jeffrey H. Cohen and Ibrahim Sirkeci. Cultures of migration: The global nature of contemporary mobility. University of Texas Press, 2011.
- Bongers, Anelí, Carmen Díaz-Roldán, and José L. Torres. Brain Drain or Brain Gain? International labor mobility and human capital formation. *The Journal of International Trade & Economic Development,*vol. 31, no. 5, 2022, pp. 647-671.
- Organisation for Economic Co-operation and Development (OECD). “The Decline in Labour Mobility in the United States: Insights from New Administrative Data”, Page 31.
- U.S. Census Bureau. “Pandemic Did Not Disrupt Decline in Rate of People Moving”.
- Urban Institute. “Job Quality and Economic Mobility”.
