DP14222 Unravelling Trade Integration: Local Labour Market Effects of the Brexit Vote

Author(s): Beata Javorcik, Benjamin Kett, Layla O'Kane, Katherine Stapleton
Publication Date: December 2019
Date Revised: September 2020
Keyword(s): Brexit, Hiring, Labour Demand, online job adverts, trade policy, trade uncertainty
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14222

This paper uses high frequency data on the near universe of job adverts posted online in the UK to study the impact of the Brexit referendum on labour demand between January 2015 and December 2019. We develop measures of local labour market exposure to the threat of trade barriers on both goods and services exports if the UK were to leave the EU without a trade deal. We find that regions that were more exposed to potential barriers on professional services exports saw a differential decline in online job adverts in the period after the referendum, particularly for higher skilled jobs. This effect was distinct from the impact of the exchange rate depreciation, uncertainty surrounding future immigration policy and the threat of future barriers on trade in goods.