Tackling Labour Immobility - Analysis and… | tutor2u Economics
Exam technique advice

Tackling Labour Immobility - Analysis and Evaluation Arguments

  • Levels: A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

Here are some analysis and evaluation paragraphs addressing this question "Examine two policies that a government might use to tackle labour market immobility."

Tackling Labour Immobility - Analysis and Evaluation Paragraphs

KAA Point 1:

Occupational immobility occurs when there are barriers facing people active in the labour market in moving from one job to another. Immobility is a cause of labour market failure and can cause persistent long-term structural unemployment. One intervention is the Apprenticeship Levy which applies to medium and larger-sized firms who must pay 0.5% of their payroll bill into a general fund and release staff for professional development courses. This element of compulsion can help overcome the free-rider problem when firms who have invested in the human capital of their workforce find valuable employees “pinched” by rival firms who get the benefit without contributing to the cost.

Evaluation Point 1:

In theory an apprenticeship levy can be an effective way of improving human capital and giving workers the transferable skills they need in a fast-changing labour market. But in practice the scheme is at risk of government failure. For example, in 2018, apprenticeship-levy paying firms only accessed £200m of an available £2 billion in levy funds and the number of new apprenticeships has actually declined in recent years. Some firms complain that the quality of training on offer from training providers is sub-prime. Employees themselves may feel that vocational qualifications remain under-valued in the labour market although the more rigorous T-level qualifications may help to address going forward.

KAA Point 2:

Geographical immobility of labour occurs when there are costs and hurdles facing people who need to move to find new work. This problem particularly affects families on relatively low income. Immobility is often the result of a huge regional disparity in housing costs to buy and also to rent. In London for example, average rents are now over 50 percent of median disposable incomes. One policy approach would be housing reforms involving a combination of scaling back planning regulations, new taxes on the capital value of land owned by investors who have gained planning permission and also a higher stamp duty on second homes. The aim would be to achieve a rise in new housingstartsandcompletions.

Evaluation Point 2:

The chronic shortage of housing supply needs to be addressed for geographical immobility to be tackled in the long run. However, there are risks and drawbacks with this approach. The effectiveness of the policy for example depends on what type of new housing is built – e.g. is it targeted at younger people? What percentage of new homes meets the price range for it to be affordable? Will housing developers instead focusonproperties that gentrify an area without tackling the root causes of housing need for families on below median incomes? Building more homes does not address the problems causes by the large number of second and empty homes which is allocatively inefficient.

Subscribe to email updates from tutor2u Economics

Join 1000s of fellow Economics teachers and students all getting the tutor2u Economics team's latest resources and support delivered fresh in their inbox every morning.

You can also follow @tutor2uEconomics on Twitter, subscribe to our YouTube channel, or join our popular Facebook Groups.

Job board

Teacher of Economics

Peter Symonds College, Winchester

Teaching Vacancies

Recruitment

Advertise your vacancies with tutor2u

Much cheaper & more effective than TES or the Guardian. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences.

Find our more ›

Advertise your teaching jobs with tutor2u

A New Home for tutor2u Resources

We've just flicked the switch on moving all our digital resources to instant digital download - via our new subject stores.

For every subject you can now access each digital resource as soon as it is ordered. This will always be the latest edition of each resource too (and we'll update you automatically if there is an upgraded version to use).

Simply add the required resources to your cart, checkout using the usual options and your resources will be available to access immediately via your mytutor2u account.