Trade openness and labor force participation in Africa: the role of political institutions*

Cooray, Arusha, Dutta, Nabamita, and Mallick, Sushanta (2017) Trade openness and labor force participation in Africa: the role of political institutions*. Industrial Relations, 56 (2). pp. 319-350.

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Abstract

Trade liberalization is usually expected to lead to greater economic activity including higher labor force participation rates. Using data from forty-eight Sub-Saharan African countries over the period 1985–2012, we explore the impact of trade openness on labor force participation rates (LFPR), and examine how political institutions such as democracy, political rights, and civil liberties can play a role in driving this relationship in the above group of low-income countries. The estimated marginal impact of openness on LFPR shows that LFPR is increasing with the level of institutional quality. In particular, political institutions are critical in enhancing the benefit from openness. Our conclusions are similar for male and female participation rates although the magnitudes of the former are higher, thus confirming that improving institutions can generate greater labor market benefits from trade in poor countries.

Item ID: 69186
Item Type: Article (Research - C1)
ISSN: 1468-232X
Copyright Information: © Wiley
Date Deposited: 06 Oct 2021 00:45
FoR Codes: 38 ECONOMICS > 3801 Applied economics > 380112 Macroeconomics (incl. monetary and fiscal theory) @ 30%
38 ECONOMICS > 3801 Applied economics > 380110 International economics @ 40%
38 ECONOMICS > 3801 Applied economics > 380111 Labour economics @ 30%
SEO Codes: 15 ECONOMIC FRAMEWORK > 1502 Macroeconomics > 150207 Macro labour market issues @ 100%
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