International Trade and Unemployment: Evidence From Selected ASEAN+3 Countries

The present study seeks to examine empirically whether exposure to international trade creates or destroys jobs for a sample of eight ASEAN+3 countries (APT). The findings of the PMG technique shows that trade liberalization policies have a negative influence on unemployment rate in the long run. Since medium and unskilled workers are the majority of the workforce, a reduction in trade barriers is likely to expand the trading sector. For the APT countries to compete globally, the trading sector is likely to shift to a more efficient production mode by using intensive capital and high skilled labor, leaving unskilled workers unemployed. The findings are robust since we use various proxies for the trade liberalization policies.