# Geographical Labor Mobility: Overview, Pros and Cons

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## What Is Geographical Labor Mobility?

Geographical labor mobility is a measure of the relative ease with which workers can relocate within a nation or region to find jobs that require their skills. Greater labor mobility in an economy is associated with higher productivity in an economy overall.

### Key Takeaways

*   Workers' mobility is determined by many factors, from the availability of transportation options to standards of living and government policies.
*   The rate of geographic labor mobility within the United States has been consistently declining since the 1980s.
*   Greater labor mobility is associated with higher productivity and economic output.

## Understanding Geographical Labor Mobility

Geographic labor mobility indicates the relative ease or difficulty that workers confront if they want or need to relocate to find better jobs.

Several factors determine geographic labor mobility, including the ease of movement and migration and the economic incentives to relocate. Physical, geographic, and political barriers to movement are key factors that can make moving more difficult.

A region's size and its job opportunities in part determine geographic labor mobility. At the personal level, however, factors such as family situation, housing availability, local [infrastructure](https://www.investopedia.com/terms/i/infrastructure.asp), and educational resources affect geographic labor mobility.

An economy's level of trade is also a direct factor in the geographic labor mobility of its workforce. For example, increasing domestic and international trade requires that corporate offices and other support structures be opened in a number of locations, increasing job opportunities in these locations.

### What Is Occupational Labor Mobility?

[Occupational labor mobility](https://www.investopedia.com/terms/o/occupational-labor-mobility.asp) indicates the degree of ease with which workers can change jobs or professions regardless of their geographical location.

## Other Elements That Affect Geographic Mobility

Other key factors can make geographic labor mobility more or less viable as an option. First, the aggregate level of education influences the mobility of the [labor force](https://www.investopedia.com/terms/l/labor-market.asp). Higher education levels are generally associated with a greater ability to move to find employment.

Personal and cultural attitudes also drive labor mobility. A person with a strong attachment to a place needs considerable motivation to relocate.

Another key determinant is [industrialization](https://www.investopedia.com/terms/i/industrialization.asp). Highly industrialized economies provide more [blue collar job](https://www.investopedia.com/terms/b/bluecollar.asp) opportunities, which increases the labor mobility of the economy as a whole. More specifically, an industrialized economy helps workers move from rural locations to larger cities where there are more [job opportunities](https://www.investopedia.com/terms/j/job-market.asp).

Government policies heavily influence geographic labor mobility. In global economic terms, the European Union actively tries to increase the geographic labor mobility of individuals by helping qualified workers find employment in European countries where their skills are in demand.

If a government wants to increase geographic labor mobility, there are several actions it can take. The country can support transportation options, help raise the [standard of living](https://www.investopedia.com/terms/s/standard-of-living.asp), and advance government policies that help with mobility within an economy.

> **Important**
>
> The use of non-compete clauses by businesses can stymie senior employees who want to create new businesses after leaving a company. In April 2024, the Federal Trade Commission issued a rule broadly banning non-compete clauses in employment contracts. It is set to take effect in September 2024, though it also faces legal challenges.

## Pros and Cons of Geographic Labor Mobility

### Benefits of Mobility

Geographic labor mobility provides several benefits to a nation's economy. Chief among them is better allocation of the supply of labor and productivity.

An economic study published in _The Yale Law Journal_ points out that geographic labor mobility makes managing macroeconomic stability easier and that local barriers to mobility can make macroeconomic policy less effective.

### Downsides to Mobility

Mobility also has its downside. Labor mobility is associated with the dissolution of local communities and even the extinction of indigenous cultures as members migrate to seek economic opportunities and resettle in areas in which they are culturally alien.

This tends to erode social capital in both the locations that workers leave and in new areas they move into.

Geographic labor mobility is also the direct cause of [brain drain](https://www.investopedia.com/terms/b/brain_drain.asp), or human capital flight, from developing regions and nations.

## Geographic Labor Mobility In the U.S.

The history of the United States presents an interesting case study of geographic labor mobility during and after the development of economic systems.

When the country was expanding westward and new industries were being developed, geographic labor mobility was at its peak. New migrants and American-born workers moved to places with economic promise.

However, the rate of moving has declined consistently since the 1980s. According to [U.S. Census](https://www.investopedia.com/terms/b/bureauofcensus.asp) data, the rate of movement between states has fallen by nearly half since 1989 while the rate of mobility between counties has declined by almost a third.

Indeed, even during the coronavirus pandemic, labor mobility continued downwards in the U.S., with just 8.4% of people living in a different residence in 2021, down from 9.3% in 2020.

## What Is Occupational Labor Mobility?

Occupational labor mobility is an assessment of the ease at which workers are able to switch jobs, often involving a new occupation or career path. Unlike geographical labor mobility, occupational mobility does not necessarily involve relocating.

## Why Is Labor Mobility Important?

[Increased labor mobility](https://www.investopedia.com/articles/economics/09/labor-mobility.asp) is generally thought to be a positive for the economy. More freedom to move tends to result in higher productivity, more satisfied employees, lower unemployment, and rising gross domestic product (GDP).

## Why Is Cross-Broder Labor Mobility Controversial?

Encouraging geographic mobility across national borders is often a point of controversy.

Opponents argue that migrant workers are usually hired because they will accept lower wages, effectively taking jobs from citizens. In extreme cases, it can lead to the overpopulation of certain areas, straining public services and pushing up the local cost of living. This can also fuel hostility and spur social unrest.

Others argue that migrant workers take low-paying, low-skilled work that few others want to perform.

A growing population usually corresponds with economic growth and prosperity.

## The Bottom Line

Geographic labor mobility is one factor among many that economists use to reveal and track the relative strength of a nation's workforce. In general, a population of workers who are free to relocate to take on new opportunities is more productive. Businesses that can recruit workers nationwide rather than locally are more likely to succeed.

> **Article Sources**
>
> 1.  European Commission. "[Annual Report on Intra-EU Labour Mobility 2020](https://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8369)."
>     
> 2.  Federal Trade Commission. "[FTC Announces Rule Banning Noncompetes.](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes )"
>     
> 3.  The Yale Law Journal. "[Stuck! The Law and Economics of Residential Stagnation](https://www.yalelawjournal.org/article/stuck-the-law-and-economics-of-residential-stagnation)."
>     
> 4.  Thomas Faist. "The transnationalized social question: Migration and the politics of social inequalities in the twenty-first century." Oxford University Press, 2018.
>     
> 5.  Jeffrey H. Cohen and Ibrahim Sirkeci. "Cultures of migration: The global nature of contemporary mobility." University of Texas Press, 2011.
>     
> 6.  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.
>     
> 7.  Organisation for Economic Co-operation and Development (OECD). "[The Decline in Labour Mobility in the United States: Insights from New Administrative Data](https://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=ECO/WKP%282020%2952&docLanguage=En)," Page 31.
>     
> 8.  U.S. Census Bureau. "[Pandemic Did Not Disrupt Decline in Rate of People Moving](https://www.census.gov/library/stories/2022/03/united-states-migration-continued-decline-from-2020-to-2021.html)."
>     
> 9.  Urban Institute. "[Job Quality and Economic Mobility](https://urban.org/sites/default/files/publication/103581/job-quality-and-economic-mobility_0.pdf)."