This paper investigates the link between trade liberalization and the job-matching process in India by estimating an aggregate matching function by incorporating trade openness as a proxy for trade liberalization. Monthly data are drawn from the National Employment Service's Employment Exchange, India's only public employment service. The results show that trade liberalization leads to a decline in the number of new hires. This implies the exacerbation of matching efficiency, described by an outward shift of the Beveridge curve. This finding is in accordance with a widely held public view that trade liberalization increases unemployment. Therefore, the Indian government should continue carrying out structural reforms for the Indian economy to deal with the inefficiencies in the labor market due to external liberalization.

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