Trade Liberalization and the Aggregate Matching Function in India

Woong Lee

Asian Economic Papers, 2017, vol. 16, issue 1, 120-137

Abstract: This paper investigates the link between trade liberalization and the job-matching process in India by estimating an aggregate matching function by incorporating trade openness as a proxy for trade liberalization. Monthly data are drawn from the National Employment Service's Employment Exchange, India's only public employment service. The results show that trade liberalization leads to a decline in the number of new hires. This implies the exacerbation of matching efficiency, described by an outward shift of the Beveridge curve. This finding is in accordance with a widely held public view that trade liberalization increases unemployment. Therefore, the Indian government should continue carrying out structural reforms for the Indian economy to deal with the inefficiencies in the labor market due to external liberalization.

JEL-codes: F33 F36 F50 F65 G00 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Working Paper: Trade Liberalization and Aggregate Matching Function in India (2014)
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