TRADE LIBERALIZATION AND LABOUR DEMAND IN INDONESIA: FIRM LEVEL DATA
Rossanto Dwi Handoyo (a), Fiqy Rabbanisyah(a)

a) FEB, Universitas Airlangga, Surabaya, Indonesia

Abstract

ABSTRACT: Trade liberalization agreement has made great opportunities to enhance economic growth for those countries who participate. Trade liberalization would then inevitably affect on factors of production within countries. The aim of study is to analyze the impact of trade liberalization on labour demand through manufacturing industries in Indonesia. This study employ industrial manufacturing firm level data over the period 2008-2013 and estimate using panel data regression analysis, Fixed Effect Method. The results indicate that tariff rates, value added, imports of raw materials, and export significantly affect the labour demand. Furthermore, labour wages negatively affect on labour demand of Indonesia manufacturing industry.

Keywords: Trade Liberalization, Labour Demand

Topic: Organizational Behavior, Leadership and Human Resources Management