Whats the Difference Between Mobility and Liquidity?
‘Mobility’ is a term used to refer to the ability of factors of production – land, labor, and/or capital – to switch between uses in different industries (sometimes called ‘sectors’). Land, for example, is a particularly immobile factor. Land used for farming can be used for a parking lot only after paying substantial costs to pave it – assuming that it’s in an area where anyone might want to park, since agriculture usually occurs in rural ares. Unskilled labor is fairly mobile; sweeping floors at McDonald’s (in the restaurant sector) is not a lot different from sweeping floors in a hospital (in the health care sector) or in a bank office (in the financial services sector). Most forms of skilled labor, on the other hand, are not particularly mobile. Their factor of production are specific to a particular sector. Gym teachers cannot easily become brain surgeons; investment advisors cannot easily become automotive engineers. These factors would incur a substantial cost to shift from one
