Economic Globalization and Unemployment: The Experience of Arab Countries

Abstract

The present study seeks to examine the impact of international trade policies on unemployment for 10 Arab countries over the period of 1991 to 2014. In addition to various trade policies measurements, the present study takes into consideration various variables that represent macroeconomic distortion policies; a country’s economic size; the quality of government institutions; and labor market regulation. Using different proxies for trade policies, the results of the Pooled Mean Group (PMG) shows that trade liberalization policies appear to decrease unemployment rates over time. The finding supports contemporary calls to participate in international trade to facilitate job creation. However, further studies are required to identify the specific channels through which trade policies can affect unemployment in the Arab region.