Labour Market Effects of International Trade When Mobility is Costly

Damoun Ashournia ()

No 751, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: I build and estimate a dynamic structural model of sectoral choices with heterogeneous workers accumulating human capital that is imperfectly transferable across sectors. Utility costs of switching sectors provides an additional barrier to mobility. Estimating the utility costs by Simulated Minimum Distance on administrative data covering the population of Danish workers and firms, costs are found to be in the range of 10% to 18% of average annual wages. By conducting counterfactual policy experiments, it is shown that the both the imperfect transferability of human capital and the utility costs are important for explaining the slow adjustment of the labour market following shocks to the economy.

Keywords: Globalisation; Adjustment costs; Worker heterogeneity (search for similar items in EconPapers)
JEL-codes: E24 F13 F16 (search for similar items in EconPapers)
Date: 2015-07-14
New Economics Papers: this item is included in nep-int and nep-mac
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Labour Market Effects of International Trade When Mobility is Costly (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:751

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