Labour Redeployment: Trends and Institutions

Branch and territorial labour shortages and excess labour suggest that the dynamic efficiency of the economy could be improved by labour redistribution. In principle, planners have the means to reallocate labour using wage differences and other material incentives. However, large-scale labour movements also involve the redistribution of investments in the non-productive sphere at the territorial level and extra benefits in kind, since the consumer goods market is also characterised by shortages. These balancing exercises may be time-consuming, expensive and, in the end, ineffective if people (for non-economic reasons, such as cultural background) do not respond to planned inducements. Small changes are less costly from any point of view, but they need a flexible environment which the centralised economy does not provide.