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.
Get full access to this article
View all access options for this article.
References
1.
AzharA.K.M.ElliotR.J.R.MilnerC.R. (1998). Static and Dynamic Measurement of Intra-Industry Trade and Adjustment: A Geometric Reappraisal. Weltwirschaftliches Archiv, 143(3), 404–422.
2.
AzharA.K.M. (2003). On the Measurement of Trade-Induced Adjustment. The School of Economics Discussion Paper Series, The University of Manchester.
3.
BalassaB. (1966). Tariff Reductions and Trade In Manufactures Among the Industrial Countries. American Economic Review, 56, 466–473.
4.
BrulhartM. (1994). Marginal Intra-Industry Trade: Measurement and Relevance for the Pattern of Industrial Adjustment. Weltwirtschaftliches Archiv, 130, 600–613.
5.
BrulhartM.HineR.C. (1999). Intra-Industry Trade and Adjustment: The European Experience. London: Macmillan Press.
6.
BrulhartM.ElliottR.J.R. (2002). Labour Market Effects of Intra-Industry Trade: Evidence for the United Kingdom. Weltwirtschaftliches Archiv, 138, 207–228.
7.
BrülhartM. (2002). Marginal Intra-industry Trade: Towards a Measure of Non-Disruptive Trade Expansion. In: LloydP. J.LeeHyun-Hoon, eds., Frontiers of Research on Intra-Industry Trade. Palgrave-Macmillan.
8.
BrulhartM.TraegerR. (2005). An Account of Geographic Concentration Patterns in Europe. Regional Science and Urban Economics, 35(6), 597–624
9.
ClarkD.P. (2002). Intra-Industry Specialization and the North American Free Trade Agreement. The International Trade Journal, 16(4), 393–411.
10.
GreenawayD.HineR.C. (1991). Intra-Industry Specialization, Trade Expansion and Adjustment in the European Economic Space. Journal of Common Market Studies, 29, 603–629.
11.
GreenawayD.HineR.C.MilnerC.R. (1994). Country-Specific Factors and the Pattern of Horizontal and Vertical Intra-Industry Trade in the UK. Weltwirtschaftliches Archiv, 130, 77–100.
HaynesM.UpwardR.WrightP. (2000). Smooth and Sticky Adjustment: A Comparative Analysis of the US and UK. Review of International Economics, 8(3), 517–532.
18.
LovelyM.E.NelsonD.R. (2000). Marginal Intra-Industry Trade and Labour Adjustment. Review of International Economics, 8, 436–477.
19.
LovelyM.E.NelsonD.R. (2002). Intra-Industry Trade as an Indicator of Labour Market Adjustment. Weltwirtschaftliches Archiv., 138, 179–206.
20.
MilnerC.WrightP. (1998). Modeling Labour Market Adjustment to Trade Liberalization in an Industrialising Economy. The Economic Journal, 108 (March), 509–528.
21.
OECD (2002). Economic Outlook171, Paris.
22.
VinerJ. (1950). Winners and Losers from Regional Integration Agreement. CEPR Discussion Paper, London.
