Jobless Industrialization and Trade Liberalization: Evidence from RTA Enactments

Mushegh Tovmasyan ()
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Mushegh Tovmasyan: RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay

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Abstract: This paper investigates whether trade liberalization has promoted industrialization over the past 30 years by using the enactments of Regional Trade Agreements (RTAs) as a proxy for trade liberalization. Leveraging panel data from 51 economies between 1990 and 2018, I employ a novel two-stage least squares estimation strategy to establish causality and address confounding factors. The findings reveal that RTAs have increased the share of manufacturing value added and output per worker, while decreasing the share of agriculture in production. Notably, these effects are not accompanied by a rise in manufacturing employment, suggesting that RTAs have promoted "jobless industrialization"—boosting manufacturing output without increasing labor in the sector. This effect is primarily driven by developed Asian and Sub-Saharan African economies, while developing Asian and Latin American economies drive the increase in manufacturing labor productivity.

Keywords: Industrialization; Trade Liberalization; Labor Productivity; RTA (search for similar items in EconPapers)
Date: 2025-10-06
Note: View the original document on HAL open archive server: https://universite-paris-saclay.hal.science/hal-05300223v1
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-05300223

DOI: 10.2139/ssrn.5108893

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