Sisira Jayasuriya: This paper estimates an aggregate matching function using data from the Indian employment exchanges, using trade openness measure as a proxy for trade liberalization for 1990–2012. It finds that there is a negative correlation between trade liberalization and new hires. It infers from this that “This implies a negative effect of trade liberalization on new job creation in India, which also indicates a negative impact on unemployment. The results of the negative relationship between trade liberalization and new hires may be consistent with a widely held public view that trade liberalization increases unemployment through a deterioration of the matching efficiency.”
Although the impact of trade liberalization on India's employment has been discussed in several studies, this appears to be the first study that explores the job-matching process using a matching function. As such, it is a commendable exercise. Further, the main result, while matching “public perceptions” of the...