Mobility Costs and the Impact of China's Export Expansion

The economic effects of international trade are linked to the ability of countries to reallocate their resources across different activities. We aim to quantify the relevance of mobility frictions for the adjustment of economies to changes in the international economic environment. We produce a model of job choice that relates the probability of a worker moving between jobs to mobility frictions and attractiveness of jobs. Estimation of this relation yields estimates for such frictions. These estimates can then be used to assess how frictions and changes in the attractiveness of jobs affect mobility decisions. A comparison of the experiences of Denmark, France and Germany in the face of the China's trade expansion will shed novel insights as to how differences in mobility frictions affect economic outnomes.