Labour market failure

Question 1

Geographical immobility causes

Answer 1

House prices are different in different regions (South vs North)
Lack of knowledge about the job availability in other areas
Social reasons - Reluctance to leave area (Children’s School)

Question 2

Geographical immobility Solutions

Answer 2

Reduce regional house prices in south - boost supply.
Increase job info to areas with high unemployment (e.g through local job centres or the internet)
Relocation subsides to workers willing to move regions
improve public transport to enable long distance commuting
Encourage firms to relocate to places with high unemployment

Question 3

Occupational immobility

Answer 3

When workers possess skills that are no longer in demand - can’t find work. Caused by structural changes in the economy - disappearance of steel, coal mining and shipbuilding industry’s

Question 4

Occupational immobility solutions

Answer 4

Retrain workers to equip them with relevant skills - however this is easier said than done (they may be old)
Education and training - however time lags

Question 5

Discrimination

Answer 5

Unequal treatment on characteristics that don’t effect their ability to do the jobs - e.g race, religion, gender, age etc.. (gender pay gap or high unemployment rates among minority groups).

Question 6

Discrimination solutions

Answer 6

Horizontal equity laws - demand businesses to treat all workers equally e.g equal pay laws, opportunities, punishing discrimination
Vertical equity - preferential treatment for some workers e.g having to have more disabled workers to undo the effect of negative discrimination.