Openness to International Trade and Income Risk in Cemac

Abstract

In this paper, the effects of international trade on income risk are investigated. Arguing that the interaction between international trade and his different channels (export share and import penetration) plays an important role in explaining labour income risk, we employ a sample of 6 central Africa's countries covering the period 1993-2013, in aggregate level, to estimate time-varying individual income risk at the sector level. The relationship between trade and labour income risk is analyzed by combining our estimates of persistent labour income risk with measures of exposure to international trade. It is established that export share have a statistically significant association with labour income risk in the CEMAC countries. Our findings are robust to the econometric techniques used, to the inclusion of a wide range of control variables.