Business, Legal & Accounting Glossary
The term mobility in economics can have completely different connotations and implications depending upon the context in which it is used. Mobility can refer to intergenerational mobility as also to the mobility of factors of production to name a few. In the backdrop of the present rise in inequality in the US, issue of degree and amount of mobility in this country has come under scrutiny. Some recent empirical studies conducted for measuring relative mobility has found ‘mobility’ to be significant. According to them, mobility has remained stable in the concerned period of study. Arguably simplest measurement of economic mobility is provided by the percentage of the population who enter into another new income quintile.
Issue of factor mobility has altogether attained a different dimension in the present-day global scenario.
Some factors responsible for this are listed below.
In recent years a marked wage differential between skilled and unskilled labour (in terms of education) has been observed in European and North American developed nations. In the US, wage inequality has come into the forefront since the 1980s. This has been a major issue of debate between trade theorists and labour theorists. The world economy in the recent past has been characterized by an increased degree of market integration and production process fragmentation. Both of these phenomenons are related to q surge in ‘international factor movements’. It has been seen that factor mobility affects wage rates. International trade affects commodity prices and consequently factor prices. And any factor price change will again induce a change in factor supply and ultimately commodity prices.
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This glossary post was last updated: 29th March, 2020 | 0 Views.