Trade Openness and Youth Employment in Sub-Saharan Africa: Should We Regulate the Labor Market?

Kpognon, Koffi; Ondoa, Henri Atangana; Bah, Mamadou

doi:10.11130/jei.2020.35.4.751

Cited by 15 publications

(9 citation statements)

References 33 publications

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“…Several of the studies found inverse relationship between trade and employment (Dutt, et al, 2008;Campos-Vázquez & Rodríguez-López, 2011;Nchom & Udeorah (2021)). Others found positive effect of trade on employment (Polat & Uslu, 2011;Anyanwu, 2014;Kpognon, et al, 2020). Non-significant effect of trade on total employment was found in Yanikkaya, 2013;Rajesh & Subash, 2015).…”

Section: Empirical Literature Reviewmentioning

confidence: 95%

“…Non-significant effect of trade on total employment was found in Yanikkaya, 2013;Rajesh & Subash, 2015). However, Kim (2011) and Kpognon, et al (2020) attribute the effect of trade on employment on rigidity or flexibility of the labour market arguing that trade positively affects employment where labour market institutions are flexible. Several of the previous studies examined the effects of exports and import components of trade on employment (Herath, 2014;Akkus, 2018;Aigheyisi, 2019).…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

“…Increase in wages also adversely affected employment generation in the sector, while the employment effect of labour productivity in the sector was positive but statistically not significant. Kpognon, et al (2020) examined the effect of trade openness on youth employment in sub-Sahara Africa (SSA) during the period 2002-2017 using pooled least squares and IV-2SLS technique to account to endogeneity of the regressors. The study found positive and significant effect of trade openness on youth employment in the continent, generally.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

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The African Continental Free Trade Area and Its Employment-Generation Potentials in Nigeria’s Industrial Sector

Aigheyisi

2021

EB&D

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The study empirically examines the employment generation potentials of the African Continental Free Trade Area (AfCFTA) in Nigeria’s industrial sector. The ARDL approach to cointegration and error correction modeling is employed for analysis of annual time series data covering the period 19912020. The study finds inter alia that the short run effect of expansion of intra-African trade (expected to result from the AfCFTA) on industrial sector employment is positive and statistically significant. The long run effect is also positive, but not statistically significant. It also finds that trade openness integration of the economy with the global market – significantly enhances employment generation in the nation’s industrial sector in the long run; though the short run effect is negative and significant. These suggest that the country’s membership of the AfCFTA and implementation of policies aimed at (cautiously) deepening the integration of the economy with the global market should be considered as supplementary avenues to achieving (sustainable) employment generation in the nation’s industrial sector in the short-and long-run. Other evidence-based policy recommendations are discussed.

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Section: Empirical Literature Reviewmentioning

confidence: 95%

Section: Empirical Literature Reviewmentioning

confidence: 99%

Section: Empirical Literature Reviewmentioning

confidence: 99%

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The African Continental Free Trade Area and Its Employment-Generation Potentials in Nigeria’s Industrial Sector

Aigheyisi

2021

EB&D

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“…It seems that because of economies of scale resulting from trade liberalisation, large firms are more efficient, productive and able to expand more quickly than small ones (Ha et al, 2020). Similarly, Kpognon et al (2020) found that trade openness had a negative and significant impact on youth employment in Sub-Saharan Africa's more rigid labour markets. In the same vein, Asaleye et al (2021) found that trade openness had a negative impact on employment and incomes in Nigeria's manufacturing and agricultural sectors.…”

Section: Introductionmentioning

confidence: 97%

Revisiting the trade openness–unemployment nexus: an application of the novel JKS panel causality test with static and dynamic panel models

Bhat

Beg²

2023

JES

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PurposeThis paper documents a robust empirical regularity: higher trade openness is associated with a lower unemployment rate. This paper also examines whether or not the effects of trade liberalisation depend on countries' income levels. Further, the dynamic causation between trade openness and unemployment is also examined.Design/methodology/approachIn order to obtain insight into the openness–unemployment nexus, following empirical methods were utilised - static panel models, dynamic panel models and a novel panel Granger causality approach proposed by Juodis et al. (2021).FindingsResults suggest that openness negatively affects unemployment; the extent to which trade liberalisation affects unemployment depends on the income level of each country. The Juodis, Karavias, and Sarafidis (JKS) test confirmed that the past values of trade openness, inflation, foreign direct investment and gross domestic product per capita contain information that helps to predict unemployment in a more robust manner. To simply put, opening upto trade may eventually become a requirement for creating more job opportunities, but this alone may not be enough. The extent to which nations benefit from trade liberalisation is largely dependent on the overall economic conditions and their capability to move up the income scale.Originality/valueA major difference between this study and those performed previously is that this study does not only examine the impact of trade openness on unemployment, but also investigates whether the unemployment effect of liberalisation is affected by countries' income levels – an issue that has received little attention in the past. Additionally, the unique panel non-causality approach put forth by Juodis et al. (2021) is used in the first instance to look into the causal link between trade openness and unemployment. This method has advantages in that the method enables capturing Granger-causality in homogeneous or heterogeneous panels amongst multiple variables.

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“…In the region, poverty, as measured by the international poverty line, remains high. Furthermore, there has been a continuous rise in the absence of economic participation and opportunities, and unemployment, particularly among the youth (Kpongnon et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Social Dimension of Inclusive Growth in ECOWAS: Implication for Poverty Reduction

Anu¹,

Emmanuel²,

Felix³

2022

CBN-JAS

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This study investigates the implication of the social dimension of inclusive growth on poverty reduction in Economic Community of West African States (ECOWAS) countries. It specifically examines how social indices of inclusive growth comprising of income inequality, education, and health outcomes affect poverty reduction. The study uses a panel dataset of the six (6) lower-middle income countries in ECOWAS which was analysed via panel Difference Generalised Method of Moment (D-GMM). The results show that GDP per capita exerts significant negative effect on poverty while inequality, education and health outcomes do not show significant effect on poverty. Although, the estimates of inequality, health and education outcomes are insignificant, poverty reduces with inequality but increases with education and health outcomes. The study submits that ECOWAS member countries have not benefited from social inclusive growth strategy in terms of eradicating poverty. Consequently, there is need for urgent and serious effort to promote social inclusion via improved health and education outcomes in addition to reduction in inequality. This will require an overhaul reform in the health and education sectors through improved funding, introduction of curriculum tailored at meeting the changing labour market needs and a wage policy that reflects the minimum international standard to improve the overall contribution of health and education to poverty reduction.

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Trade Openness and Youth Employment in Sub-Saharan Africa: Should We Regulate the Labor Market?

Cited by 15 publications

References 33 publications

The African Continental Free Trade Area and Its Employment-Generation Potentials in Nigeria’s Industrial Sector

The African Continental Free Trade Area and Its Employment-Generation Potentials in Nigeria’s Industrial Sector

Revisiting the trade openness–unemployment nexus: an application of the novel JKS panel causality test with static and dynamic panel models

Social Dimension of Inclusive Growth in ECOWAS: Implication for Poverty Reduction

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