{"title":"Trade and employment in the formal and informal sectors: A natural experiment from Cambodia","authors":"Kiyoyasu Tanaka , Theresa M. Greaney","doi":"10.1016/j.asieco.2023.101676","DOIUrl":null,"url":null,"abstract":"<div><p>How does trade affect formal and informal jobs in developing economies? This paper estimates the impact of exports on employment in the formal and informal sectors by exploiting the European Union (EU)’s reform in rules of origin for duty-free market access, which produced a large positive shock to Cambodia’s garment exports to the EU. We use nationally representative datasets on formally registered and unregistered establishments in Cambodia for 2009, 2011, and 2014. The results show that the export shock caused large employment growth in formal garment establishments, but had little effect on employment in informal garment establishments. While the positive effect is pronounced for incumbent establishments and female workers, our estimates are not magnified by transitions between formal and informal status in the garment industry. Thus, trade promotes employment disproportionately in the formal sector.</p></div>","PeriodicalId":47583,"journal":{"name":"Journal of Asian Economics","volume":null,"pages":null},"PeriodicalIF":2.9000,"publicationDate":"2023-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Asian Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1049007823000969","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
How does trade affect formal and informal jobs in developing economies? This paper estimates the impact of exports on employment in the formal and informal sectors by exploiting the European Union (EU)’s reform in rules of origin for duty-free market access, which produced a large positive shock to Cambodia’s garment exports to the EU. We use nationally representative datasets on formally registered and unregistered establishments in Cambodia for 2009, 2011, and 2014. The results show that the export shock caused large employment growth in formal garment establishments, but had little effect on employment in informal garment establishments. While the positive effect is pronounced for incumbent establishments and female workers, our estimates are not magnified by transitions between formal and informal status in the garment industry. Thus, trade promotes employment disproportionately in the formal sector.
期刊介绍:
The Journal of Asian Economics provides a forum for publication of increasingly growing research in Asian economic studies and a unique forum for continental Asian economic studies with focus on (i) special studies in adaptive innovation paradigms in Asian economic regimes, (ii) studies relative to unique dimensions of Asian economic development paradigm, as they are investigated by researchers, (iii) comparative studies of development paradigms in other developing continents, Latin America and Africa, (iv) the emerging new pattern of comparative advantages between Asian countries and the United States and North America.