What they Don’t Want You to Know about Globalization: It’s impact on employment in Nigeria and India

Abstract

This study attempts to investigate the historical and economic narratives, highlighting missed points in the comprehension of globalization and the effects on present-day labor markets in developing countries – India and Nigeria, between 1990 and 2023. The study fills a noticeable gap in the extant literature about the impacts of globalization on labor market dynamics in developing countries. There are positive and negative impacts of globalization, including perceived negative impacts such as loss of employment and positive impacts such as shifts in global wage dynamics. Finding correlations between employment quality and globalization-related variables such as technological advancements, foreign direct investments (FDI), time-specific events, and policy implications can help in developing policies capable of mitigating the adverse effects of globalization on the labor market. The study adopted a panel data analysis that used a fixed effects model to analyze data from the World Bank’s development indicators, the International Labor Organization (ILO) statistics, and the KOF Globalization Index. The study found that while globalization boosted economic integration, it worsened job security, with a globalization coefficient of −0.35 (p < 0.001) and increased wage disparities with a coefficient of 0.58 (p < 0.001). Other findings show a positive correlation between technological advancement and employment quality with a coefficient of 0.10 (p = 0.020); a negative correlation between FDI and employment quality at −0.03 and P = 0.010, and a positive correlation between policy variables and employment quality with a coefficient of 0.25 (p = 0.002). The findings suggest that robust national policies can be used to mitigate the negative consequences of globalization and the policymakers must adopt comprehensive policy measures to benefit from globalization effects while addressing emanating challenges. This study contributes to the literature by offering a nuanced exploration of the multifaceted relationship between global economic integration and local labor market outcomes.