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Journal of Economic Integration 2020 December;35(4) :751-777.
DOI: https://doi.org/10.11130/jei.2020.35.4.751
Trade Openness and Youth Employment in Sub-Saharan Africa: Should We Regulate the Labor Market?

Koffi Kpognon1 Henri Atangana Ondoa2 Mamadou Bah 1

1Pan African University, Cameroon
2University of Yaoundé II, Cameroon
Corresponding Author: Koffi Kpognon ,Email: kkoffide7@gmail.com
Copyright ©2020 Journal of Economic Integration
ABSTRACT
This study analyzes the effect of trade openness and labor market regulation on youth employment in Sub-Saharan Africa (SSA). It covers a panel of 41 countries over the period 2002-2017, a period determined by the availability of the relevant data on labor market regulation. The results obtained using pooled ordinary least squares (OLS) regression and instrumental variable-two-stage least squares (IV-2SLS) estimators reveal that trade openness and labor market regulation rigidity have a positive and significant impact on youth employment in SSA. More interestingly, trade openness negatively and significantly affects youth employment in more rigid labor markets in SSA. This result remains robust in several robustness tests. Finally, this study also examined the case of young women’s employment in SSA.

JEL Classification
E24: Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
F16: Trade and Labor Market Interactions
J08: Labor Economics Policies
Keywords: Trade Openness | Labor market regulation | Youth Employment | Pooled ordinary least squares (OLS) regression | instrumental variable-two-stage least squares (IV-2SLS) | Sub-Saharan Africa (SSA)
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