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The Nexus Among Employment, Productivity And Trade Openness: Evidence From Brics And Indonesia

Author

Listed:
  • Badri Narayan Rath

    (Indian Institute of Technology Hyderabad, India)

  • Masagus M. Ridhwan

    (Bank Indonesia, Indonesia)

Abstract

This paper investigates the nexus among employment, labor productivity and trade openness in Brazil, Russia, India, China, South Africa (BRICS), and Indonesia using annual data (1991–2018). The results suggest a long-run relationship among the variables but only in the agricultural sector of these economies. We also find a unidirectional causality running from employment to productivity in only the agricultural sector. Similarly, trade openness also Granger causes employment. Our final result indicates that trade openness positively influences labor productivity in the long-run. From a policy perspective, it is imperative for BRICS and Indonesia to target employment generation by promoting trade openness.

Suggested Citation

  • Badri Narayan Rath & Masagus M. Ridhwan, 2020. "The Nexus Among Employment, Productivity And Trade Openness: Evidence From Brics And Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 23(4), pages 463-484, December.
    • Handle: RePEc:idn:journl:v:23:y:2020:i:4a:p:463-484
    DOI: https://doi.org/10.21098/bemp.v23i4.1363
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    Cited by:

    1. Narayan, Paresh Kumar & Rath, Badri Narayan & Syarifuddin, Ferry, 2022. "Understanding the role of trade agreements in Indonesia’s FDI," Journal of Asian Economics, Elsevier, vol. 82(C).

    More about this item

    Keywords

    Labor productivity; Trade openness; Sectoral change; Panel cointegration; BRICS; Indonesia;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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