Globalisation and Unemployment: Panel Data Evidence from South American Republics

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Latin American Studies Program, University of Delaware, Newark, DE
South American republics have taken substantial steps towards liberalising trade and capital flows since the late-1980s. Coincidentally, the unemployment rate in this region has increased during this period. This phenomenon has led many researchers to conclude that globalisation failed to deliver higher employment in these countries. This article examines whether this is true by focusing on a panel of nine South American republics. The evidence presented suggests that rising imports are behind some of the increment in the unemployment rate in these nations. However, other variables associated with globalisation (exports, FDI, and other capital inflows) are found to have an insignificant effect on the unemployment rate.
Unemployment, Trade reform, Financial reform, Latin America