The EU Custom Union on Trade Specialisation and Labour Market: Implications for Turkish Industries

Veysel Ulusoy and Necip Cakir
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Necip Cakir: Prof. Dr. Necip Cakir, Faculty of Economics and Administrative Sciences, Bahcesehir University, Besiktas, Istanbul, Phone:0090-212-381-0452, E-mail: ncakir@bahcesehir.edu.tr.

Journal of Interdisciplinary Economics, 2009, vol. 20, issue 3-4, 343-359

Abstract: The purpose of this paper is to analyze the labor market implications of the EU Custom Union membership of Turkey by using detailed trade data and presenting a geometric tool on trade specialization. Theories suggest that trade expansion through integration may create inefficiency in labor market due to rigidities in factor prices and mobility of factors. Different formation of trade, such as intra-industry trade (IIT, the export and import of similar goods) may, however, entail smaller labor-market adjustment costs than inter-industry trade. Results show that Turkish membership to the EU Custom Union has not improved the specialization procedure in trade. Results further imply that labor market has encountered big adjustment problems.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jinter:v:20:y:2009:i:3-4:p:343-359

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