Trade Contraction and Employment in India and South Africa during the Global Crisis

SummaryThe paper estimates the effects of the 2008–09 trade contraction on employment in India and South Africa, using social accounting matrices (SAMs) in a Leontief multiplier model. Employment results are presented at aggregate and industry levels and examine gender and skills biases. The most notable finding is that India and South Africa experienced substantial employment declines as a result of trade contraction with the European Union and the United States. A large share of these declines occurred in the non-tradable sector and resulted from income-induced effects, illustrating how a shock originating in the tradable goods sector had strong ripple effects throughout these economies.