Aid for Trade and Employment in Developing Countries: An Empirical Evidence

Abstract

Abstract This article examines the employment impact of Aid for Trade (AfT) flows to recipient countries. The analysis has used an unbalanced panel dataset comprising 126 countries, of which 42 Least developed countries (LDCs) over the period 2002–15. Based on the two‐step system Generalized Methods of Moments approach, the empirical analysis shows that over the full sample, AfT has exerted a positive and significant effect on total (male and female) employment share, as well as on female employment share, but no significant effect on male employment share. However, these effects are not the same in LDC economies versus non‐LDC economies.

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