Intra-industry trade expansion and employment reallocation between sectors and occupations

• Autor(a) principal: Cabral, Manuel
• Data de Publicação: 2006
• Outros Autores: Silva, Joana
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/1822/7201
• topic: Intra-industry trade; Worker mobility; Labour market adjustment; Social Sciences

This paper re-examines the relationship between trade and labour market adjustment costs by explicitly considering the effects of occupational mobility. We investigate the hypothesis that intra-industry trade expansion entails lower adjustment costs than inter-industry trade expansion—the so-called Smooth Adjustment Hypothesis (SAH). This paper makes two new contributions. First, the introduction of a new adjustment variable that considers reallocation between sectors and occupations. Second, a test of the SAH using panel data with relevant trade and non-trade control variables, which overcomes some of the methodological limitations of former studies. The results suggest a confirmation of the SAH and stress the importance of considering the effects of worker moves between occupations in the study of trade-induced adjustment.