The nexus among employment, productivity and trade openness: Evidence from brics and 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.