Globalization and Employment: Evidence from Pakistan

Abstract

Globalization is one of the main contemporary issues. No country can
survive in isolation. Globalization has both benefits and costs and the
effects depend on the host country’s socioeconomic and political
factors. Present study investigates the impact of globalization on
employment in Pakistan. Globalization is represented by proxy
variables such as trade openness, inflow of foreign direct investment
and workers remittances. In addition to these proxy variables
globalization index is also used. Empirical analysis is done by using
time series data for the period of 1973-2009 by employing Johansen
co-integration technique and ECM for short run analysis. Results show
that foreign direct investment, workers remittances and economic
dimension of globalization are creating employment opportunities not
only in short run but also in long run in Pakistan, while trade openness
and social and political dimension of globalization negatively affects
the employment due to some external and internal imbalances in the
country.