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The Real Effects of Brexit on Labor Demand: Evidence from Firm-level Data

Author

Listed:
  • Hang Do

    (University of Southampton)

  • Kiet Duong

    (University of York)

  • Toan Huynh

    (Queen Mary University of London)

  • Nam T. Vu

    (Miami University)

Abstract

Using the distance to the Irish border for UK firms that did not change their location after the 2016 Referendum to isolate the effects of Brexit at the firm level, we find Brexit implementation in 2020 caused exposed firms to cut their workforce by up to 15.7% on average relative to non-exposed firms. These exposed firms are also more likely to have lower growth expectations and more likely to increase their research and development (R&D) expenditure. Such results highlight the expectation channel and support the hypothesis that firms prioritize innovations in response to Brexit.

Suggested Citation

  • Hang Do & Kiet Duong & Toan Huynh & Nam T. Vu, 2024. "The Real Effects of Brexit on Labor Demand: Evidence from Firm-level Data," Working Papers 117, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    • Handle: RePEc:cgs:wpaper:117
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    File URL: http://cgr.sbm.qmul.ac.uk/CGRWP117.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Brexit; firm responses; technology; EU workers;
    All these keywords.

    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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