Trade liberalization, labor market regulations and labor demand in Cameroon

In this article we analyze whether trade and labor market liberalization affects the demand for total, skilled and unskilled employment in the manufacturing sector. The analysis uses Cameroonian firm-level data before (1988-91) and after (1994-01) both reforms. Comparing treated and untreated (control) firms in a difference-in-differences framework, we find that the reforms have been successful in boosting the demand for unskilled jobs, explaining 1.3-9.5% increase in the demand for unskilled workers. We also find evidence of no clear effects of reforms on total and skilled labor demand. The sector-level results do not change the previous findings. The findings are also robust to changes in the definition of treated and control firms.