Abstract
This paper uses 66 cross-country data covering the period from 2006 to 2016 to investigate the impact of import and export on the unemployment rate. Labour market friction and trade friction are controlled in the empirical models. In addition, we estimate six sub-samples, which are developing and developed countries, low industry ratio and high industry ratio countries, and low service ratio and high service ratio countries in addition to the whole sample to consider the levels of similar economic development and industrial structure. The estimation results suggest that import decreases the unemployment rate in sub-samples consisting of developing countries, high industry ratio countries, and low service ratio countries. On the contrary, export has positive and significant impacts on the unemployment rate in sub-samples consisting of developed countries, low industry ratio countries, and high service ratio countries. Therefore, this study suggests that the impacts of import and export on unemployment depend on the economic development and industrial structure of each country.
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