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

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  • Veysel Ulusoy

    (Prof. Dr. Veysel Ulusoy, Faculty of Economics and Administrative Sciences, Bahcesehir University, Besiktas, Istanbul, Phone:0090-212-381-0457, E-mail: vulusoy@bahcesehir.edu.tr.)

  • 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.)

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.

Suggested Citation

  • Veysel Ulusoy & Necip Cakir, 2009. "The EU Custom Union on Trade Specialisation and Labour Market: Implications for Turkish Industries," Journal of Interdisciplinary Economics, , vol. 20(3-4), pages 343-359, March.
    • Handle: RePEc:sae:jinter:v:20:y:2009:i:3-4:p:343-359
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