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Lost In Transition: The Costs And Consequences Of Sectoral Labour Adjustment


  • Stephen Tapp

    (Queen's University)


This paper uses an equilibrium search and matching model to study Canada's sectoral labour adjustment in 2002-2006 during an increase in global commodity prices and exchange rate appreciation. I estimate economically significant adjustment costs for the aggregate economy in this episode and demonstrate that difficulty in transferring skills between jobs for individual workers can be an important contributor to these aggregate costs. The analysis also demonstrates that the level of unemployment benefits impacts the economy's sectoral composition, its aggregate productivity, and the speed of its adjustment to shocks.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Stephen Tapp, 2007. "Lost In Transition: The Costs And Consequences Of Sectoral Labour Adjustment," Working Paper 1142, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1142

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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Labour market flows revisited
      by Stephen Gordon in Worthwhile Canadian Initiative on 2015-10-16 05:56:42


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    Cited by:

    1. Simona E. Cociuba & James C. MacGee, 2018. "Demographics and Sectoral Reallocations: A Search Theory with Immobile Workers," UWO Department of Economics Working Papers 20182, University of Western Ontario, Department of Economics.
    2. repec:eee:quaeco:v:70:y:2018:i:c:p:6-20 is not listed on IDEAS
    3. Zhang, Yahong, 2018. "Unemployment fluctuations in a small open-economy model with segmented labour markets: The case of Canada," The Quarterly Review of Economics and Finance, Elsevier, vol. 70(C), pages 6-20.
    4. Dorothee Flaig & Harald Grethe & Scott McDonald & Khalid Siddig, 2012. "Intersectoral factor movements: do adjustment costs matter for welfare?," EcoMod2012 4418, EcoMod.

    More about this item


    Sectoral Labour Reallocation; Adjustment Costs; Search and Matching; Skills and Training; Unemployment;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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