The purpose of this study is to evaluate the impact of trade openness and economic globalization on employment. This study employs the Bounds test method and Autoregressive Distributed Lag(ARDL) model for Iranian economy during 1979-2009. Comparing with the other empirical studies, this study in addition to traditional index of trade liberalization as trade openness has been applied the new and more comprehensive economic globalization index as one dimension of the new KOF globalization index. This index includes the actual flows of trade such as trade, foreign direct investment and portfolio investment, and restrictions such as trade barriers and tariffs on actual flows. Also, the other control variables effective in employment such as GDP per capita, industrialization and government size has been considered. The results show a negative relationship between trade openness and employment but they show that the impact of economic globalization on employment is positive. Thus, it seems that the new economic globalization (KOF index) which is a broader comprehensive index is a better proxy of globalization.

Keywords: Employment, Trade Openness, Economic Globalization, Bounds Test, ARDL, Iran.

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