Labor-Market Effects of Intra-Industry Trade: Evidence for the United Kingdom. - According to the "smooth adjustment hypothesis", the labor-market adjustment costs entailed by trade liberalization are lower if trade expansion is intra-industry rather than inter-industry in nature. In this paper, we study the link between trade and labor market changes in UK manufacturing industries during the 1980s. We use industry-level measures of unemployment duration and wage variability as proxies for adjustment costs, and we relate them to various measures of intra-industry trade. Our evidence offers some support for the smooth adjustment hypothesis.
|Number of pages
|Published - 1 Jan 2002
ASJC Scopus subject areas
- Business, Management and Accounting(all)