What is Occupational Labor Mobility?

Occupational labor mobility is the ease with which a workforce can switch industries, retrain for new jobs and transfer to other sectors.

How Does Occupational Labor Mobility Work?

For example, consider ice delivery or typewriter repair. A hundred years ago, before the advent of the refrigerator and the computer, these jobs were plentiful and important. As technology evolved, however, these jobs evaporated. People who had delivered ice or repaired typewriters had to find jobs in new industries in order to earn incomes, which may have required most if not all of these workers to learn new skills and pursue other interests. The degree to which they were able to 'jump' to new industries easily was a sign of the country's occupational labor mobility.

Why Does Occupational Labor Mobility Matter?

Occupational labor mobility lubricates an economy and insulates it from downturns. When a labor force is able to move from one industry to another or from one job type to another relatively quickly, unemployment numbers decrease and productivity increases. When occupational labor mobility does not exist, workers tend to rely on one skill set and cannot change jobs easily or at all. In many cases, governments set aside funds for worker retraining and education in order to maintain high occupational labor mobility.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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