Exchange rate fluctuations provide a source of movements in employment both within and across industries. Previous studies focus on only developed countries, such as OECD countries. But country and industry characteristics in developing countries are different from those of developed countries, so that the effects of fluctuations in real exchange rates on employment in developing countries may be different from those in developed countries. This paper examines the relationship between exchange rates and employment using a panel of 28 industries in three developing countries (Korea, Malaysia, and the Philippines) from 1970 to the 1990s using a panel VAR model. The impulse response functions show that Korean and Malaysian employment responds positively to exchange rate shocks. However, Philippine employment responds positively only after 1985. Compared to the developed countries over the same period, the developing countries show a larger response to exchange rate shocks.

I. Introduction
II. The Relationship between Exchange Rates and Employment
III. Model Specification and Data
IV. Estimation Results
V. Summary and Conclusion