Why Labour Mobility Matters — Factors of Production | IGCSE Economics

Exam Frequency Analysis

Past paper frequency (2018 to 2024)

This topic accounts for approximately 6% of your exam marks.

stable

Low

Stable6%

Four factors and their rewards appear occasionally; usually 2 to 4 marks when tested, not on every paper.

When labour is highly mobile, workers can move from areas or industries with surplus labour (e.g. declining shipbuilding regions) to areas or industries with labour shortages (e.g. growing tech centres). This:

Reduces unemployment, because more workers find jobs.
Reduces worker shortages, because firms can recruit more easily.
Raises productivity, because labour ends up in its most productive use.

When labour is immobile, the opposite happens: unemployment stays stuck in declining regions while firms in other regions cannot fill vacancies. This is called structural unemployment and is covered in topic 14.