Impact of Trade in Services on Employment

The trend of trade all over the world has changed and now trade has been classified into two broader ways i.e. Trade in services and Trade in goods. With the passage of time, economies are shifting from agrarian to secondary and then tertiary sector. As the importance of services sector growing immensely and its share in the world trade is expanding enormously the present study briefly explain the trade in services and the important factors that influence employment creation. The study implies the ARDL technique to examine the long run and short run relationship between the variables for the period 1970-2008. By using annual data, the empirical results indicate that overall impact of trade in services on employment is negative and as GDP increases demand for services trade grows. FDI and Urban population growth play an imperative role in the growth of services sector and Pakistan trading its services by utilizing its resources that expands the employment pole.