Trade liberalization in developing countries: What are the effects of trade liberalization in CEMAC countries on overall unemployment, youth unemployment, and unemployment rates by gender? A practical study using the Beta regression method.

Abstract

The countries of the Central African Economic and Monetary Community (CEMAC) are facing unemployment due to increased trade liberalization. This situation places the region among those with the highest unemployment rates. With this in mind, the objective of this study is to examine the impact of trade openness on unemployment rates (overall, among youth, among young men, and among young women) within CEMAC. A beta regression is applied to data from 2002 to 2022 for the six CEMAC countries to obtain the results. The results indicate that, in CEMAC countries, trade openness reduces total unemployment, including among young men and young women. These results corroborate those of the Tobit model, used to assess robustness. These results confirm the hypothesis formulated in this study: trade openness reduces unemployment in CEMAC countries. This finding indicates that trade openness reduces unemployment in CEMAC countries, suggesting that economic policy should prioritize measures to strengthen trade openness. This would entail, among other things: (i) fostering a trade-friendly environment, particularly by reducing trade barriers such as tariffs; (ii) significantly improving the business climate; (iii) prioritizing trade agreements; and (iv) promoting and encouraging export-oriented production activities.