Trade and Employment From Myths to Facts - International Labour ...

NEW EVIDENCE ON TRADE AND
EMPLOYMENT: AN OVERVIEW
2.1 INTRODUCTION
By Margaret McMillan 1 and Íñigo Verduzco
2
In 1983, Anne O. Krueger, completed three volumes titled Trade and Employment in
Developing Countries for the National Bureau of Economic Research. In Volume 3,
“Synthesis and Conclusions”, she writes:
“Everyone agrees that unemployment is a ‘problem’ and that increased
employment opportunities are an ‘objective’ in most LDCs.
Employment and employment growth are major points of concern in
virtually all of them. There is less agreement, however, on the nature
and cause of the ‘problem’ and on why employment creation is desirable.”
Strip away the dates from these volumes and one would be hard pressed to
guess whether the volumes were written today or 30 years ago. For example, the
official unemployment rates presented in table 2.1 indicate that unemployment in
developing countries is much higher today than it was in the 1980s. Moreover, the
numbers in table 2.1 almost certainly understate unemployment in these countries
since they typically do not include those who choose not to participate in the
workforce. 2
1 The authors would like to thank Dani Rodrik, Bill Gibson, and the editors of this book for comments
and suggestions. We would also like to thank participants in the Expert Meeting on Assessing and
Addressing the Effects of Trade on Employment organized by the EU and ILO for their
comments.
2 For example, the World Bank’s report “Economic Growth, Employment Generation and Poverty
Reduction in Nigeria” 2009 points out that a common problem in the African context is that all
those who do not seek work because they feel that there is no work available are likely to be classified
as economically inactive. As a result, official unemployment numbers are sometimes quite low.
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