Answer to Question #98622 in Macroeconomics for annie

Question

One of the major complaints of the British people for Brexit is, the argument that labor mobility
enforced by EU on England, cause wage level of British workers to fall. Assume this claim of British citizens is correct. Show on two seperate graphs, one representing British labor market, the other labor market of the rest of EU. And show the effect of labor mobility in both markets. Explain in a few words the reason behind this process.

Answer 1

Labor mobility enforced by EU on England can cause the increase in labor supply, as a result the quantity of labor will increase, and the wage level of British workers will fall. But labor mobility can also improve productivity of labor and fill the shortages of labor in some industries faster. So, labor mobility can be good for both markets too, especially if the equilibrium level of wages is almost the same in these markets.