This report assesses geographic labour mobility within Australia and its role in a well-functioning labour market.
Geographic labour mobility is an important element of a well-functioning labour market. By improving matches between employers and workers, geographic labour mobility can contribute to economic efficiency and community wellbeing.
Advances in transport and communication technologies have broadened the scope of geographic labour mobility. This mobility can take the form of residential moves, long-distance commuting and telecommuting.
Geographic labour mobility has been an important mechanism for adjusting to the demographic, structural and technological forces shaping the Australian economy. It has accommodated differences in the pace of economic activity across Australia and enabled wealth to be more widely distributed across the country.
Labour appears to be responding to market signals and moving to areas with better employment and income prospects. These movements, together with the increase in long-distance commuting and temporary immigration, have assisted in meeting labour demand in many parts of the country.
Gravity (a region's size), distance and economic opportunities are the main determinants of geographic labour mobility at an aggregate level.
At the individual level, personal and locational factors interact to influence whether and where people move. Life events and family circumstances appear to be the most important factors in such decisions, but factors related to housing, employment, local infrastructure and a person's level of education also play a prominent role.
Areas of high unemployment and disadvantage vary in their mobility — some have high rates of mobility, while others have low rates of mobility.
While geographic labour mobility is assisting labour market adjustment, high unemployment is persisting in some regions, and there is room for improvement.
There are no simple levers to affect geographic labour mobility. Many policies aiming to influence where people live and work in regional and remote areas have had limited effectiveness. Policies will be more effective if they are highly targeted.
In addition to geographic labour mobility, a flexible, accessible and quality education and training system is important for meeting Australia's continually changing workforce and employment needs.
The negative consequences of some poorly designed policies, such as taxation, housing and occupational licensing, include reduced geographic labour mobility. Reform in these areas would lessen impediments to geographic labour mobility, and also have broader benefits.
The community has been poorly served by the lack of progress in occupational licencing and action should be expedited.
Improved access to administrative data would assist better understanding of geographic labour mobility in Australia.