Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314696 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11657
Publisher: 
CESifo GmbH, Munich
Abstract: 
While FTA negotiations are proliferating, our paper shows that targeting the appropriate sector is crucial for generating employment opportunities subsequent to FTA. In particular, we show that, countering conventional wisdom, targeting skill-biased exports and not the sector that employs unskilled workers who usually constitute the large core of the unemployed, could ameliorate the unemployment problem. The mechanism hinges on how the demand for goods produced by the non-traded sector is stimulated by such a policy. If targeting the skilled sector with an FTA can stimulate local demand more, employment impact of FTA may be more significant.
Subjects: 
FTA
minimum wage
demand effect
non-tradable
employment
elasticity of substitution
factor-intensity
JEL: 
C52
D50
F16
J21
J31
Document Type: 
Working Paper
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