Labor is an important component of
economic development. Employers need skilled labor to produce new products and
lower skilled labor to fulfill standard functions. When areas gain or lose
their workforce it has a natural impact on the economic strength of that area.
Research by Son and Noja, 2013) delves into labor’s economic contributions as
well as the influx/outflux of human capital in new EU countries. The general
findings can be applied to other areas and highlight the need to match skills
to the market.
When surplus labor exists, the
unemployment rate will be higher. In this study, the labor was broken into low
and high skilled labor for analysis. Higher unemployment causes an outflux of
individuals seeking opportunities in other geographic locations where jobs are plentiful. This
is a natural cause of opportunity matching skills to create an employment
opportunity.
Those that update their skills and
find new types of employment (labor shift) may more easily find future opportunities. It is
an economic and personal choice based upon the ability to attend school, obtain
new certificates, or move to locations that offer employment opportunities.
There is a level of personal and societal adjustment that occurs in response to
economic shifts in the market.
When both low and high-skilled labor
migrates out of an area it indicates the fundamentals of the infrastructure are
not in place. Skill levels are not matching opportunities and those with the
most resources can move to other areas to find greater opportunities. Losing
highly skilled labor means creating new opportunities will be more
difficult in the future as a result of human capital drain.
Destination
countries that receive highly skilled labor have an easier time growing. This
growth is based upon the skills received and whether or not they are matching
the economic needs of the area. Sending countries slow down in technological
progress, innovation and GDP per capita growth rate while receiving countries
increase in their abilities to enhance economic growth. Sending countries will
need to educate their populations to create greater home abilities and
rebalance available skills to the market.
Son, L. & Noja,
G. (2013). The role of the human capital and investment in human capital within
the sustainable socio-economic development. How labour force migration affects
competitiveness? Theoretical and Applied
Economics, 20 (1).
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