What is a specific factor?
In the modal developed in this chapter, we assume that there are two factors of production, land and capital, which are permanently tied to particular sectors of the economy. In advanced economic, however, agricultural land receives only a small part of national income. When economists apply the specific factor model to economies like that of the United States or France, they typically think of factor specificity not as a permanent condition but as a matter of time. For example, the vats used to brew beer and the stamping presses used to build auto bodies cannot be substituted for each other, and so these different kinds of equipment are industry-specific. Given time, however, it is possible to redirect investment from auto factories to breweries or vice versa, and so in a long-term sense both vats and stamping presses can be considered to be two manifestation of a single, mobile factor called capital.
In practice, then, the distinction between specific and mobile factors is not a sharp line. It is a question of the speed of adjustment, with factor more specific the longer it takes to redeploy them between industries. So how specific are the factor of production in the real economy?
Workers who have fairly general skills, as opposed to highly specific training, seem to be quite mobile, if not quite as mobile labor in the modal. One useful clue comes from the time it take labor to move between geographic locations. One influential study finds that when a U.S. state hits economic difficulties, workers quickly begin leaving for other states; within six years the unemployment rate falls back to the nation average. This compares with a lifetime of 15 or 20 years for a typical specialized machine, and perhaps 50 years a shopping mall or office building. So labor in certainly a less specific factor than most kinds of capital. On the other hand, highly trained worker are pretty stuck with their craft: A brain surgeon might have made a pretty good violinist, but she cannot switch careers in mid-lift.