Impact of Trade Openness on Unemployment: East, South and Southeast Asian Countries (2006 – 2016)

Abstract

Recent statistics have shown how trade has grown quickly over the last decades in East, South, and Southeast Asian countries. East and Southeast Asian countries have been among the most dynamic participants in international trade. It strongly implies estimating how trade openness effects unemployment in East, South, and Southeast Asian economies. This paper empirically investigates the impacts of measures of trade openness on the unemployment rate in an unbalanced panel context for the period 2006-2016. The analysis focuses on the 16 east, south, and Southeast Asian countries, which are highly ranked in terms of their trade openness: Philippines, Singapore, Vietnam, Thailand, Malaysia, Indonesia, Timor-laste, China, Hong Kong, Korea, Japan, India, Pakistan, Sri Lanka, Bangladesh, and Maldives. The results illustrate the negative relationship between trade openness and the unemployment rate. It has been found that trade openness reduces the unemployment rate significantly.