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Economic models usually assume free movement of labor when actually labor is quite restricted in its movement thanks to immigration laws. Capital is very mobile
by Synaesthesia 9y ago
Economic models usually assume free movement of labor when actually labor is quite restricted in its movement thanks to immigration laws. Capital is very mobile and can flow easily to where costs are low.
- mooreds 9y agoAnd not just immigration laws, but family ties, moving expenses, higher rents, etc, even within a country. There are a number of reasons it's harder to move labor than capital.