Globalization and Its Effects On Employment

The globalization, creating numerous opportunities, has caused some important concerns, in particular, for employment and inequality. In this paper, the relation of globalization and employment, for eighteen countries in 1980-2000, has been analyzed by coefficient of correlation and t- test. The ratios of trade to GDP, and FDI to GDP, and the share of manufactures in exports measure the global economic integration- or globalization. On the bases of the correlation analysis for each country, the coefficient sign has been different. In simultaneous study, the coefficient sign of correlation has been negative in all cases and significant for the share of manufactures in exports. Also, the correlation between unemployment rate and the pace of globalization has been as expected and significant.The empirical analysis indicates that active participation in world economy -global economic integration,, can effectively reduce unemployment rate provided that entry of FDI accelerates the share of manufactures in exports. And this certainly requires macroeconomic stability and the improvement of productivity.