The Exposure of Different Occupation Groups and Local Labour Markets to Brexit

Trade shocks are likely to have heterogeneous impacts across workers. We use detailed micro data to examine the exposure of UK workers to a Brexit-related trade shock. We construct a model of labour demand that accounts for changes in patterns of demand for industry output, the skill and industry composition of the local labour market, and the role of input-output links across industries. We  find large differences in exposure across skill groups and within skill groups across local labour market. Expected wage declines are predicted to be greatest for skilled blue-collar workers, who are in the upper-middle section of the earnings distribution.