Trade, globalization, employment, and wages: Evidence from Arab MENA

The purpose of this paper is to provide an evaluative analysis of the impact of trade and globalization on income, employment, and wages in the Arab countries of the Middle East and North Africa (MENA) over the 1980-95 period. It first studies the behaviour of Arab barter, income, and factoral terms of trade, and analyzes their effects on Arab income. It then evaluates the extent of globalization in the Arab world, and considers its political significance. This is followed by the derivation of a relationship that will determine the behaviour of wages and employment, and a case study of the impact of trade on relative wages in Egypt. The paper closes with a political economy analysis of the autonomy of the Arab state in an era of globalization.