Dual Edge of Export Quality: Does it Boost Employment? Insights from OECD and G20 Countries

The quality of traded goods is crucial for entering into high-income markets and for the continuously growing and sustained earning of export revenues. However, many countries are constrained by poor quality and often face rejections and are simultaneously battling with the unemployment problem as well. While facing quality-related market entry barriers, they try to improve export quality, and an important question arises that ‘how the export quality improvement will impact their labour market?’ which is largely unexplored in existing literature. Thus, this research investigates how export quality (using three alternate indicators) impacts aggregate employment as well as skill level employment (low, high, semi and unskilled) after taking into account other potential determinants of employment, for 45 countries from G20 and OECD for the period 1990–2019. The GMM dynamic panel estimation reveals that higher export quality significantly boosts both aggregate employment and employment for low-and high-skilled workers but contrasting and more nuanced results are obtained for other skill level workers and developed and developing countries. The findings have valuable policy implications for achieving economic resilience and designing long-term employment friendly trade policies through strategic export quality improvements. Subject classification codes: F16, F10, F66, J23, J24, O33