Trade Openness and Labor Force Participation in Africa: The Role of Political Institutions

32 Pages Posted: 9 Mar 2017

See all articles by Arusha V. Cooray

Arusha V. Cooray

Embassy of Sri Lanka, Oslo

Nabamita Dutta

University of Wisconsin, La Crosse

Sushanta Mallick

Queen Mary - University of London

Date Written: April 2017

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.

Suggested Citation

Cooray, Arusha V. and Dutta, Nabamita and Mallick, Sushanta K., Trade Openness and Labor Force Participation in Africa: The Role of Political Institutions (April 2017). Industrial Relations: A Journal of Economy and Society, Vol. 56, Issue 2, pp. 319-350, 2017. Available at SSRN: https://ssrn.com/abstract=2929375 or http://dx.doi.org/10.1111/irel.12175

Arusha V. Cooray (Contact Author)

Embassy of Sri Lanka, Oslo ( email )

Norway

Nabamita Dutta

University of Wisconsin, La Crosse ( email )

Dept. of Economics, 1725 State Street
La Crosse, WI 54601
United States
6087855294 (Phone)

Sushanta K. Mallick

Queen Mary - University of London ( email )

School of Business and Management
Mile End Road
London, England E1 4NS
United Kingdom
+44 20 7822 7447 (Phone)

HOME PAGE: http://webspace.qmul.ac.uk/skmallick/

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