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Trade Liberalization and Aggregate Matching Function in India

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  • Lee , Woong

    (Korea Institute for International Economic Policy)

Abstract

This article investigates the link between trade liberalization and the job matching process in India. The aggregate matching function in India is estimated by incorporating the trade openness as a proxy for trade liberalization. The monthly data are drawn from Employment Exchange in India, the only public employment service in the country. Overall, it appears that trade liberalization leads to a decline in new hires. However, the analysis of period decomposition shows that correlation between trade-to-GDP ratio and new hires is negative and significant only in the period of the Ninth Plan, 1997 to 2002, when political influence delayed economic reform. The suggestion is made that the negative relationship between trade liberalization and new job creation does not hold except for the period of political influence and thus the Indian government should continue to promote external reform.

Suggested Citation

  • Lee , Woong, 2014. "Trade Liberalization and Aggregate Matching Function in India," Staff Papers 14-4, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepsp:2014_004
    DOI: 10.2139/ssrn.2495192
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    Cited by:

    1. Lee , Woong, 2015. "Estimating Regional Matching Efficiency in the Indian Labor Market: State-Level Panel Data for 1999-2013," Working Papers 15-3, Korea Institute for International Economic Policy.
    2. Mehmet Huseyin Bilgin, 2019. "Trade Liberalization: Is It Desirable for All Developing Economies?: A Literature Review," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 199-204, December.

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    More about this item

    Keywords

    Matching Function; Trade Liberalization; Labor Market; India;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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