Social Inclusion, Employment and Intra-National Trade: some Evidence from Spanish Regions

This paper explores the relationship between intra-national trade, employment, and social inclusion using panel data including 15 Spanish regions from 1999 to 2019. We adopt the instrumental variables approach to investigate how Spanish intra-national trade affects the regional labour market. The main results indicate interregional trade has a significant and positive impact on regional employment. In contrast, the empirical results suggest that the effects of intra-regional trade on employment are negative and insignificant. We also adopt the instrumental variables method to address the issue of endogeneity, taking into account spatial dependence. The findings confirm that interregional trade has a significant and positive impact on the share of the employed population, while reducing the number of unemployed people.