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Panel Data Model Analysis on the Relationship Between Export and Employment: The Case of OECD Countries

Hande Aksoz-Yilmaz ()

Journal of Economic Policy Researches, 2021, vol. 8, issue 2, 115-139

Abstract: For many years, researchers have focused more on the effects of exports on employment; however, the literature in this area has not found common ground, and the relationship between exports and employment is still not clear. This study investigates the impact of export on the employment of 28 OECD (The Organisation for Economic Co-operation and Development) countries using panel data estimation techniques that reveal the effect of different properties between units, allows the degree of freedom to increase, and, therefore, offers more effective estimators using cross-section data together. Thus, the study uses data spanning from 2001 to 2019 and variables such as employment, exports, economic growth, per unit labor costs, trade openness, financial openness, and unemployment payment rates. The findings reveal that the exports of 28 OECD countries are significant and have a negative significant effect on their employment. The economic growth, employment level of the previous period, trade openness, and exports have an impact on employment. While economic growth, trade openness, and previous employment levels have a positive effect on employment in the current period, exports have a negative effect on employment. The results imply that the export may affect to employment level. depending on political and economic factors, particularly the production structures of countries, contrary to traditional foreign trade theories that state that exports increase employment. It is critical to adapt to the rapidly changing market demand and create a competitive environment that can encourage adaptation. Policymakers and social partners have a key role to play through active cooperation in connecting education and training systems to industry and matching labor supply to demand.

Keywords: Export; employment; foreign trade theories; labor force; panel data model JEL Classification : F16; J23; C33 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.26650/JEPR.880876

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