Trade openness, employment and backsliding in the Philippines
Date
2008-03
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Abstract
This paper presents an empirical study on the relationship between trade openness and the general employment level using Philippine data. Moreover, it discusses the danger posed by backsliding policies. Our findings are as follows. First, using the aggregate data estimated through Ordinary Least Squares (OLS), the paper shows that as the country moves towards a more open economy, the demand for labor is shifted upward. Trade openness in the long run results to positive growth in the employment level. On the other hand, the estimation reveals that under the implementation of trade policy reversals there is a decline in the demand for labor. These findings are consistent with the prospects of the Ricardian and Heckscher-Ohlin models of trade.