Impact of Changes in Consumer Preferences on Sectoral Labour Reallocation

This study empirically investigates the impact of changes in consumer preferences on
labour reallocation across the Italian economic sectors. For this purpose, coherent sectoral
time series of consumer preferences and labour units are constructed from Italian national
accounts and consumption expenditure data. In line with recent firm-level evidence, empirical findings indicate a positive and significant effect of preference changes on labour
reallocation. Results are robust to several econometric specifications, different procedures
to elicit preference changes, as well as the introduction of time-varying price coefficient
and sector-specific effects of total consumption expenditure.