Economic complexity and employment in emerging countries: a comparative analysis

Abstract

Economic complexity is a measure of a country’s knowledge intensity by assessing the diversity and sophistication of its exports, productivity and development levels. However, the current literature does not comprehensively understand how economic complexity influences different employment segments in emerging economies. Employment is a significant component of sustainable development, particularly when considering the youthful population of emerging economies. Therefore, the study examined the role of economic complexity on employment in BRICS + and MINT countries, using data spanning 27 years, from 1995 to 2021. The study employs panel-corrected standard error and feasible generalized least squares estimators. The findings show that regardless of the employment indicators used, the results demonstrate that economic complexity significantly and positively impacts the employment rate in BRICS + and MINT countries. In addition, when the MINT and BRICS + countries are examined in separate regression models, the findings suggest that the effect of economic complexity on aggregate and youth employment is higher in MINT countries compared to BRICS + countries. In comparison, the effect of economic complexity on industrial employment is higher in BRICS + countries than in MINT countries. These results support BRICS + and MINT nations’ efforts to enhance the capacity of their economies to produce more complex goods.