3.5 - Labour Immobility: Consequences

Question 1

How does labour immobility cause structural unemployment?

Answer 1

Workers unable to adapt
Skills do not match opportunity/demand

Question 2

How does labour immobility cause inflexible markets?

Answer 2

Skills don’t match labour demand
Workers not multi-faceted

Question 3

How does labour immobility cause persistent shortages + surpluses?

Answer 3

Shortages in inflexible sectors
Surplus in adaptable sectors
Economic imbalance
Workers not transferable

Question 4

How does labour immobility affect efficiencies?

Answer 4

Rising costs - Training etc.
Lost productive +allocative efficiency

Question 5

How does labour immobility depress incomes?

Answer 5

Long term, persistent unemployment
Reduced income flows + lifetime earnings
Welfare state

Question 6

How does labour immobility cause rising inequality?

Answer 6

Regional disparities
Geo. factors
Income inequality

Question 7

How does labour immobility harm social welfare?

Answer 7

Income + inequality based social costs
Relative poverty

Question 8

What are the basic consequences of labour immobility?

Answer 8

Damages output
Lost social welfare
Unemployment
Economic vulnerability