The proposition that labour market adjustments to intra-industry trade are less costly than adjustments to inter-industry trade is a widely-held belief amongst trade economists. If it is the case that there are significant sector-specific skills, then this ‘smooth adjustment hypothesis’ seems intuitive. However, direct evidence relating to this issue remains largely anecdotal. In this Paper we adopt the methodology of the micro-econometric labour literature to estimate the returns to tenure within firms, industries and occupations in order to predict the costs, in terms of wage losses, of moving jobs between and within sectors. To do this we use a large panel of individual workers for the UK over a long period (1975–1998), which enables us to control for unobserved fixed effects which may jointly determine the propensity to move jobs and the wage level.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2710.
Find related papers by JEL classification: C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data F16 - International Economics - - Trade - - - Trade and Labor Market Interactions J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993.
"Earnings Losses of Displaced Workers,"
American Economic Review,
American Economic Association, vol. 83(4), pages 685-709, September.
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