Trade, Skills and Adjustment Costs: A Study of Intra-Sectoral Labor Mobility

Robert J.R. Elliott, University of Birmingham
Joanne K. Lindley, University of Sheffield

Abstract

The relationship between the ability of workers to change job, sector or industry and the short-run adjustment costs associated with a reallocation of labor is the subject of lively debate among academics. This paper examines recent sector and industry level labor market adjustment in the UK using data from the Quarterly Labour Force Survey. We explore the link between the nature of UK trade patterns and labor adjustment within the manufacturing sector and employ a multinomial logit approach to examine the determinants of “within” and “between” industry mobility. By controlling for individual skill specificity we find some evidence of a link between intra-industry trade and intra-industry labor adjustment.