The Effects of Trade on Unemployment: Evidence from 20 OECD countries

Jaewon Kim ()

No 2011:19, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: This study empirically investigates if international trade has an impact on aggregate unemployment in the presence of labour market institutions. Using data for twenty OECD countries for the years 1961-2008, this study finds that an increase in trade leads to higher aggregate unemployment as it interacts with rigid labour market institutions, whereas it may reduce aggregate unemployment if the labour market is characterised by flexibility. In a country with the average degree of the labour market rigidities, an increase in trade has no significant effect on unemployment rates.

Keywords: Unemployment; Trade; Labour market institutions; Panel-data analysis; Instrument (search for similar items in EconPapers)
JEL-codes: C33 F16 F41 J50 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2011-05-05
New Economics Papers: this item is included in nep-int and nep-lab
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:sunrpe:2011_0019

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