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Occupational mobility of labour (Greater occupational mobility (Reduced…
Occupational mobility of labour
Occupational mobility is the ability of labour to switch between different occupations.
Determinants
Educational requirements for jobs
Licenses to enter a profession
Transferable skills of workers
Structural employment change
Decline of heavy industries
Rising incomes encourages a shift towards service industries
Automation
Foreign competition
long-term regional decline, e.g. Welsh mines
Outsourcing of production overseas
IMPORTANT: structural unemployment is waste of resources and is thus LMF!
Policies to reduce occupational immobility
Subsidise the provision of vocational training by private sector firms to raise the skills level
Invest in training schemes for the unemployed to boost their human capital
Occupational mobility
Supply elastic
Large pool of workers
Occupation immobility
Reduced supply of workers in some area
Supply inelastic
Greater occupational mobility
Lower structural unemployment
Reduced wage inflation
less shortages
More economic growth
less regional and national unemployment
reduce absolute poverty, but may increase relative poverty
less inflation
current account improves
budget position improves
impact on local community is debatable