Lack of willingness to move stopping people from earning more

Workers are missing out on a £2,000 pay rise by not moving within the UK for work.

Relocating fell to its lowest point in 2010 as the financial crisis made people wary of taking risks with their jobs, and fresh analysis by the Resolution Foundation shows the number of people moving to take up a new role is down 25% since 2000.

The researchers found that, even years after the economic downturn, mobility remains subdued at 0.6%, compared with 0.8% in 2000.

This is despite employment and the financial incentives associated with moving for work returning to pre-crisis levels.

The think tank said the decline in regional movement was having a significant impact on individuals and their families, as well as on the economy.

“Job mobility matters not just for the individual getting the pay rise but to our economy as a whole,” foundation policy analyst Stephen Clarke said.

“On a basic level that’s about avoiding labour shortages, but more importantly in an economy nearing full employment, ensuring the talent and potential of individuals and firms doesn’t go to waste is essential to boosting productivity.”

Workers who move typically receive a £2,000 pay rise premium compared to someone staying put with the same employer, the study said.

They would have also been £320 better off than someone who moved jobs but remained in the same region.

The reduction in mobility has been driven primarily by younger and highly educated groups.

The share of people under 35 moving regions and changing jobs has fallen by 20%, and even though the population has risen, similar numbers are moving today as did at the turn of the millennium.

The reluctance of younger people to move for work is surprising given they are the demographic that benefit the most from doing so.

According to the study, under30s who move region and employer can expect a typical pay rise of 11%.

There has also been a reduction in mobility among graduates, with 1.8% moving employer and region in 2001, compared to just 1% last year.