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.