Answer to Question #98948 in Macroeconomics for annie

Question

Starting with 1980’s economists within the neoclassical school have increasingly emphasize the
necessity of having a flexible labor market. One of the characteristics of the flexible labor market is increased level of mobility between sectors and occupations. Write a factor that can increase this kind of mobility within the labor market.

Answer 1

For the purpose of increasing labor's mobility bewteen sectors and occupations in a national economy, it is essential to provide employees with appropriate skills to be able to move from one sector to another. That is why level of education of employees define the degree of their mobility between sectors. Additionally, wages and salaries in the different sectors should not be regulated. It is going to increase the level of competition between the industries.