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<p>The quality of traded goods is crucial for entering into high-income markets, continuous growth and long-term earning of export revenues. However, many countries are constrained by poor quality and often face rejections and are simultaneously battling with the unemployment problem. While facing quality-related market entry barriers, they try to improve export quality and face important question: whether and how this export quality improvement will impact their labour market? The issue is largely unexplored in existing literature. This research investigates how export quality (using three alternate indicators) impacts aggregate employment as well as skill level employment (low, high, and semi-skilled) after taking into account other potential determinants of employment, for 45 countries from G20 and OECD for the period 1990–2022. Our finding reveal that export quality has labour substitution effects overall. We get consistent results using GMM and Driscoll Kraay Fixed effects and Double Machine Learning – Partially Linear Regression (DML-PLR) models as well. We also find that quality upgrading significantly boosts low skill employment for 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.</p>

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Dual edge of export quality: does it boost employment? Insights from OECD and G20 Countries

  • 期刊论文

  • 发表日期：

    2026年5月7日

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  • Manish Kumar Sharma,
  • Anwesha Aditya

摘要

The quality of traded goods is crucial for entering into high-income markets, continuous growth and long-term earning of export revenues. However, many countries are constrained by poor quality and often face rejections and are simultaneously battling with the unemployment problem. While facing quality-related market entry barriers, they try to improve export quality and face important question: whether and how this export quality improvement will impact their labour market? The issue is largely unexplored in existing literature. This research investigates how export quality (using three alternate indicators) impacts aggregate employment as well as skill level employment (low, high, and semi-skilled) after taking into account other potential determinants of employment, for 45 countries from G20 and OECD for the period 1990–2022. Our finding reveal that export quality has labour substitution effects overall. We get consistent results using GMM and Driscoll Kraay Fixed effects and Double Machine Learning – Partially Linear Regression (DML-PLR) models as well. We also find that quality upgrading significantly boosts low skill employment for 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.