Mobility of Factors of Production

Mobility of factors of production refers to ease with which a factor can be transferred from one use or location to another. If easy to transfer factor from one use or location to another, the factor is said to be mobile and if it is not it is said to be immobile. There are two aspects to the mobility to factors of production

  • Mobility from one employment to another. This is called occupational mobility
  • Mobility from one place to another otherwise called geographical mobility

Land: Physically, land is immobile. Thus can’t be moved from one place to another. Therefore geographically, land is not mobile. Occupationally; land is mobile since it can be used to produce different products.

Capital: Generally, capital is mobile both geographically and occupationally. This is because most types of capital such as vehicles can be moved from one place to another and put to different uses. However infrastructure such as roads, railway, networks and heavy machinery are immobile.

Entrepreneur: It is probably the most mobile factor of production. This is partly because the basic functions of the entrepreneur are common to all industries. The entrepreneur is also able to move to any region and work there.

Labour: It is relatively mobile geographically but less mobile occupationally. Thus, while labor can move from one area to another, it is more difficult for people to change occupations, especially if they are highly specialized or skilled.

Factors Affecting the Mobility of Factors of Production

  • Specificity of the factor – a factor is said to be specific then it is specialized. Specific factors are immobile.
  • Time taken to modify a factor: it refers to time it takes to acquire new skills, to retain or to modify a specific factor. If it takes a very long time, the factor will be immobile but if it takes a short time, it will be fairly mobile.
  • The reward offered in new location or occupation: If it is substantially better than what the factor is currently earning, it is likely to be mobile. However if the reward is less, the factor the factor will be immobile.
  • The duration a factor has been in the present occupation is another important factor affecting the mobility of factors of production. After being in an occupation for a long time there is a tendency especially for labor to get used to and prefer the current occupation.
  • Security of job and fringe benefits offered: factor affecting the mobility of factors of production particularly applies to labor. Employees are less mobile in a job that offers better security and fringe benefits.
  • The general state of security. It applies to the location of new job.
  • The nature of the factor
  • Cost of living is also an important factor affecting the mobility of factors of production since areas of high cost of living will push labor away.
  • Social, cultural and political differences
  • Age: This factor affects mostly labor. Older workers are less mobile compared to young ones.

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