International Labour Mobility and Its Affect On Countries
The term labour mobility refers to geographical and occupational movement of the people. It is a best way of reducing the problem of unemployment. In other words, labour mobility indicates is a concept that enables the people to move one place to another place with the purpose employment.
Under the labour mobility, labour can move within an economy and between different economies. It is a significant factor in the economic study because it depicts that how labour move and what is impact of the labour mobility on the economy and production.
In the business environment, when labour mobility happens between two countries then it is called international labour mobility. The role of the international labour mobility is significant to improve the relationship between the two countries. Labour mobility is also important to reduce shortage of labour (Wenkai, et al., 2011).
The growing and maintaining a high level of labour mobility allow country to allocate the resources effective manner.
In the international trade, international labour mobility is the movement of the people between the two countries. It also shows the movement of the international factors. The international labour movement is based on the difference in resources between countries. In the language of economy, during the labour mobility, workers should have an
equalizing effect on wages with concerning same industry. This report defines the concept of the international labour mobility that develops the depth understanding of the labour mobility among the reader.
This report also determines the cause of the international labour mobility and also evaluates effects of the international labour mobility on the country.
In the current scenario, whole world is aware about the concept of the International labour mobility. Before 1990, international labour mobility did not become much famous but introduction of the globalisation developed it at the great extent. It helped the worker to move for employment without much limitation.
The globalisation was helpful the workers and government to improve the economic condition. The main purpose of the international labour mobility is to ground for the formation of an entire world economic system. Along with this, there are various causes of the international labour mobility.
In this, it is analysed that the main objective of the international labour mobility is to provides strength to the international system and develop an integrated international system. At the same time, it is also caused by the factors factor of the internal and external economic development (Niebuhr, et al., 2012). The international economic is generally happed between two countries.
The cause of the labour movement is rapidly changes in the needs and production process of the organisation. Along with this, it is also observed that technology is also developing that need the skilled and professional workers. It is difficult for companies and countries to find out the worker in the sufficient number.
Due to this, government allows the people of other country to come and join their industries Parey & Waldinger (2011). Along with the expectation of the organisation to expand business is also cause of the international labour movement.
Furthermore, workers go to other country with the purpose of the education and training. According to Dalen & Henkens (2012), all workforces do not have equal natural ability and efficiencies due to this, government and industries promote international labour mobility.
In the views of Niebuhr, et al., (2012) the international labour mobility is significant for the both labour and counties. It is helpful to improve the structure of the industry in the country. If a worker moves from the decaying industry they can be diverted to expanding industry.
It helps the labour to learn more and earn more. By the help of international labour mobility, the worker or labour leave their village and hometown and go to international job centre to improve their prospects. It also improves economic condition of the labour that is also benefit for the country. They play a great role in the economic development of the country.
The process of the international labour mobility is also important to reduce the unemployment rate of the country. The worker moves from place where they have not employment Niebuhr, et al. (2012). It is a significant way of the decline the unemployment rate of the country. Hence, it can be said the international labour mobility is beneficial for both labur and country.
The research study of Dustmann et al (2013), there is vital role of the international labour mobility on the growth the country. A country gets the benefits if it has the minimum barrier in the international labour mobility. It shows that there a huge job opportunities in the country
In word of Dalen & Henkens (2012), international labour mobility affect the both counties that send the labour and that receive the labour. The impact of the international mobility can have positive impact on the both counties in the context of the economic development and human resource development. It allows the countries to transfers the skills and contribute in the culture development.
The research study of Docquier, et al. (2015) investigate the impact of the international labour mobility on the country. In this research, it finds that by the help international labour mobility a developing or poor country can get advantage of the employment of developed and rich country. The rising the concept of the labour mobility affect the financial flow of the country.
It helps the country to deal with the labour shortage. In the business environment, there some countries they face the labour shortage in the term of the skilled employees. Along with this, there are some job position where domestic worker do not want to work. The international labour immigrants can fill these positions. The UK has believed on the immigrants to work in healthcare sector.
The international labour mobility is also effective to prevent the wage inflation. If a country observes the labour shortages then it also feels strong upward pressure on wages and it may be possible that high wage can lead to the inflation pressures. The free movement of the labour attracts the peoples to move for employment into in a country.
It is also effective prevent the excess of wage inflation. Along with this, the international labour mobility is also helpful for a country to enhance the demand. It creates the additional demand of the domestic product among the international market.
The main focus the international labour mobility is to increase the labour supply and push down the wages but at the same time it is also effective to lead the additionally demand Parey & Waldinger (2011). The economic growth of the UK has been boosted by increase in the population.
At the same time, international labour mobility is also helpful and useful to develop the more flexible labour market. In an economy, it can be seen that there is a shortage in the some professional sectors such as teaching and nursing. The vacancies cannot fulfil quickly because there is need to provide training to the employees.
Due to this, government and organisations import the profession form the other countries that are already trained and master in this field. If there is a free movement of the worker among the two countries, the skilled labour can be attracted to complete these vacancies.
It shows that by the help of the international labour mobility countries can develop the flexible working market and cab overcome shortage quicker.
Timmermans & Boschma (2014) conducted a research on the impact of the international labour mobility and found that international labour mobility is effective to fill the undesirable job.
In the developed counties, it is difficult for the employer to seek a employee or labour on the unsavoury position because people do not like do these job. In this condition, international labour mobility allows the employer seek an employee who can work at the unsavoury position.
Unsavoury position can related to some interested job and includes the involve cleaning, bar work or dangerous jobs. International labour mobility help the developed country overcome this problem. The country can call lobar from the developing country. Beside of this, labour of developing country join the job due to developed countries offers well wages them.
The role of the international labour mobility is also effective for a county’s worker to do work another place. The concept of the free movement of the labour enables citizen of a country to move on another country. It enables the worker to work elsewhere there they want.
For example, during the EU membership, more than 2 million people of Britain moved outside of the county under the free movement of labour. At the same time, it is also observed that the international labour movement help the country to deal with the demographic challenges.
In the global environment, there are various countries that are facing the problem of the unemployment due the increasing the population (Leeson & Gochenour, 2015). The free movement of the labour allows the country to minimise this provable by allowing the people to go outside of the country for getting job.
Along with this, it is also analysed that free flow of labour is also effective to the capitak movement between the two countries. It removes the barriers from the movement of the capital that is significant advantage.
The free movement of the labour provides the equal opportunities to all member state citizens high and average earners get the same benefit with the facilities of services. It also allows the peoples to get training and develop their skills. The free movement of the labour increases the production of the county that helps the country to get the competitive advantage.
At the same time, it is also found that free movement of labour also provides advantage to the travel and airline industry. There is a significant role of the international labour mobility on the sales of the air line industry. It is because when the labours travel from one country to another county, they take the kelp of the airline service.
According to Ricardian model, in free trade, the countries which pay low wages, it may cause harm the country which pays high wages. A country gains trade benefits if a country has a competitive advantage in terms of producing specific good. This model suggests that the international labour mobility causes productive differences due to differences in labour productivity.
However, Heckscher Ohlin model suggests that impact of labour mobility depends on the abundance of the production factors in a country (Wenkai, et al., 2011).
For instance, labour mobility may cause lack of labour in a particular country that may cause be harmful to its economy due to affecting the labour intensive industries like apparel market. In addition, Niebuhr, et al., (2012) depict that there is possibility of wage inequality due to international labour mobility resulting in a negative impact on the country.
For instance, developed countries are equipped with large amounts of high skilled labour, while developing countries are relatively well equipped with low skilled labour. Computer production requires high skilled labour, while clothing requires low skilled labour.
That’s why; developed countries will export computers, whereas developing countries will export cloth. Due to this, the relative price of cloth will decline in developed countries, but the price of computers will increase in developing countries.
At the same time, it can also be determined that there is downward pressure on wages as because of international labour mobility across the countries. It may cause changes in wage distribution as the mobility of low skilled labour in industrialized country may affect the wages of high skilled labour.
Because of this, low-waged workers lose whereas medium and high paid workers gain from this labour flow. For example, Dustmann et al. (2013) find that 1% increase in the share of migrants in the UK-born working age population results in 0.6% decrease in the wages of the 5% lowest paid workers and an increase in the wages of high paid workers.
However, the study of van Dalen & Henkens (2012) reveals that labour mobility from low wage country to high wage country may also cause unemployment for unskilled employees in the high wage country. For example, workers usually move to foreign countries or developed countries to get paid more.
But, if wages do not fall, then it is difficult for the employers to generate extra jobs and immigration that causes unemployment especially for unskilled labour. Lack of skilled workers declines the incentives for the countries to recruit the low skilled workers.
If the countries fail to provide training to people or attract the high competent workers, then it may be difficult to develop labour market supplying jobs for unskilled workers (Niebuhr, et al., 2012).
On the other hand, Parey & Waldinger (2011) argue that there is possibility of issue related to infrastructure development due to high flow of people across the countries. A rapid labour flow causes an increase in population in the country that places strain on public services like health, education and housing.
Due to this, the government needs to cut the aspects of public spending affecting the infrastructure development of the country. For example, public services like NHS in the UK have faced pressure due to not meeting growing demand of healthcare as a result of rising immigrant population.
At the same time, it also causes welfare cost of the country where the labour immigrates due to increasing cost of providing public services. It may also cause poverty risk in the country because many migrants are exploited by the businesses that have monopsony power in a local labour market.
On the other hand, the study of van Dalen & Henkens (2012) pointed out that increase immigration due to the free flow of labour across the countries may cause housing crisis as there is requirement of more number of houses. The increasing demand of houses also raises the prices and rents that also increase the living costs.
The additional flow of people causes a gap between the supply and demand of the houses in the country where the inflow of the labour occurs. Apart from this, it is also analysed from the study of Niebuhr, et al. (2012) that the international labour mobility increases the congestion and population density that also affects the quality of life.
For example, UK has limited land to build new infrastructure in form of road and house, but rapid rise in population because of labour movement may contribute in more traffic congestion and create economic and social costs for the country. In addition, Docquier, et al. (2015) reveal that the increasing population due to international labour mobility also causes strain on local resources and service and loss of business confidence.
Meanwhile, the research of …..points out the problem of brain drain as developing countries may lose their skilled labour due to free flow of labour across the countries. Developed countries attract the skilled labour through attractive wages as it is not easy for the developing countries to retain the skilled staff.
It may cause negative impact on the economic development of the developing countries by affecting the productivity and innovation. But, Parey & Waldinger (2011) opine that there may be non-economic issues due to international labour mobility as large influx of the people from different cultures creates social changes and problems like insufficient housing, high unemployment and crime in the country.
In relation to this, Timmermans & Boschma (2014) depicted that social security is a major issue of international labour mobility as it increases the number of immigrants including criminals that leads to increase in number of crimes in the country affecting economic and social aspects.
On the other hand, Leeson & Gochenour (2015) argued that there may be possibility of competition between internal and international migrants as migrants displace workers from the developing countries or less advantaged regions, who are ready to move internally.
It is because foreign nationals take the position of the potential native migrants. The presence of labour in the developed areas also causes a limitation for the movement of the capital in the less developed areas.
From the above discussion, it can be concluded that there is a significant role of the international labour mobility and free movement of labour on the economic performance of a country. Under the labour mobility, labour can move within an economy and between different economies.
It is a significant factor in the in the economic study because it depicts that how labour move and what is the impact of the labour mobility on the economy and production. In this, it found that international labour mobility is effective to prevent of a shortage of labour in the country. Along with this, the international labour mobility is also helpful for a country to enhance the demand.
It creates the additional demand of the domestic product among the international market. Furthermore, it is also concluded that the concept of the free movement of the labour enables citizen of a country to move on another country. It enables the worker to work elsewhere there they want.
International labour mobility is also helpful and useful to develop the more flexible labour market in the country. In the same concern of this, it is also analysed that the international labour mobility is also helpful to prevent the wage inflation in the country. In this, it is found that there role of the free labour movement is also effective to control the employment rate.
On the basis of the discussion, it can also be summarized that international labour mobility also has negative effects on the countries. It is evaluated that this labour mobility may cause the possibility of wage inequality, changes in wage distribution and unemployment for unskilled employees in the high wage country.
At the same time, it can also be concluded that the international labour mobility may cause issue related to infrastructure development due to strain on public services augment and housing crisis. In addition, it also causes congestion and population density that may cause economic and social costs for the country.
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Leeson, P., & Gochenour, Z. (2015). The economic effects of international labor mobility. The Economics of Immigration: Market-Based Approaches, Social Science, and Public Policy, 11-37.
Niebuhr, A., Granato, N., Haas, A., & Hamann, S. (2012). Does labour mobility reduce disparities between regional labour markets in Germany?. Regional Studies, 46(7), 841-858.
Parey, M., & Waldinger, F. (2011). Studying abroad and the effect on international labour market mobility: Evidence from the introduction of ERASMUS. The Economic Journal, 121(551), 194-222.
Timmermans, B., & Boschma, R. (2014). The effect of intra-and inter-regional labour mobility on plant performance in Denmark: the significance of related labour inflows. Journal of Economic Geography, 14(2), 289-311.
van Dalen, H. P., & Henkens, K. (2012). Explaining low international labour mobility: the role of networks, personality, and perceived labour market opportunities. Population, Space and Place, 18(1), 31-44.
Wenkai, S., Chongen, B., & Peichu, X. (2011). The effect on rural labor mobility from registration system reform in China. Economic Research Journal, 1, 28-41.
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