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Is Trade Liberalization a Solution to the Unemployment Problem?

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  • Halit Yanikkaya

    (Gebze Institute of Technology)

Abstract

This paper examines how trade liberalization affects the growth rate of employment in developed and developing countries. The estimation results imply that trade openness in the form of higher trade volumes has not been successful in generating jobs in developing countries. The overall weak, negative employment response to trade volumes may be explained by the negative output response to trade openness in these countries. Our estimates also indicate that higher trade volumes have adverse effect on industrial and agricultural employment in developed countries. Moreover, trade barriers have relatively little adverse effect and/or in some cases positive effect on employment both in developing and developed countries. Thus, it is probably safe to conclude that both higher (or lower) output and employment growth rates can stem from trade and industrial policies implemented by these countries.

Suggested Citation

  • Halit Yanikkaya, 2008. "Is Trade Liberalization a Solution to the Unemployment Problem?," Working Papers 2008/17, Turkish Economic Association.
  • Handle: RePEc:tek:wpaper:2008/17
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    References listed on IDEAS

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    Cited by:

    1. Judzik, Dario, 2014. "Heterogeneous labor demand: sectoral elasticity and trade effects in the U.S., Germany and Sweden," MPRA Paper 62768, University Library of Munich, Germany.
    2. Ramazan EKİNCİ & Osman TÜZÜN & Fatih CEYLAN & Hakan KAHYAOĞLU, 2017. "Dışa Açıklık ile İşsizlik Arasındaki İlişki: Seçilmiş AB Ülkeleri ve Türkiye Üzerine Zamana Göre Değişen Parametreli Bir Analiz Algıları," Sosyoekonomi Journal, Sosyoekonomi Society, issue 25.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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