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Trade and labour standards: theory and new empirical evidence

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Author Info

  • Vivek Dehejia
  • Yiagadeesen Samy

Abstract

Recent trade negotiations, both at the regional and multilateral level, have seen a resurgence of the issue of trade and labour standards. Labour interests in high-standards countries argue that low labour standards are an unfair source of comparative advantage, and that increasing imports from low-standards countries will have an adverse impact on wages and working conditions in high-standards countries, thus leading to a race to the bottom of standards. For low-standards countries, there is the fear that this is just a form of disguised protectionism and that the imposition of high labour standards upon them is equally unfair since it will erode their competitiveness, the latter being largely based on labour costs. Our objective in the present paper is to cast some light on the above debate from both a theoretical and empirical perspective. In particular, we first discuss some possible theoretical links between labour standards and comparative advantage through their effects on the terms of trade. We then investigate empirically the relationship between labour standards, comparative advantage and export performance. Overall, our empirical results suggest that caution should be exercised before drawing broad conclusions on the magnitude and direction of these effects.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/0963819042000218692
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 13 (2004)
Issue (Month): 2 ()
Pages: 179-198

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Handle: RePEc:taf:jitecd:v:13:y:2004:i:2:p:179-198

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Web page: http://www.tandfonline.com/RJTE20

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Related research

Keywords: International trade; labour standards; comparative advantage;

References

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  1. Cigno, Alessandro & Rosati, Furio C. & Guarcello, Lorenzo, 2002. "Does Globalisation Increase Child Labour?," IZA Discussion Papers 470, Institute for the Study of Labor (IZA).
  2. Gabriel Rodriguez & Yiagadeesen Samy, 2003. "Analysing the effects of labour standards on US export performance. A time series approach with structural change," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1043-1051.
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Citations

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Cited by:
  1. KAMATA Isao, 2014. "Regional Trade Agreements with Labor Clauses: Effects on labor standards and trade," Discussion papers 14012, Research Institute of Economy, Trade and Industry (RIETI).
  2. Michaël Bonnal, 2010. "Export Performance, Labor Standards and Institutions: Evidence from a Dynamic Panel Data Model," Journal of Labor Research, Springer, vol. 31(1), pages 53-66, March.
  3. Siroën, Jean-Marc & Granger, Clotilde, 2009. "Cases to Include Labour Standards in Trade Agreements," Economics Papers from University Paris Dauphine 123456789/1546, Paris Dauphine University.
  4. Siroën, Jean-Marc & Bazillier, Remi & Duc, Cindy & Arestoff, Florence & Granger, Clotilde, . "Les normes de travail dans les traités de libre-échange," Economics Papers from University Paris Dauphine 123456789/3202, Paris Dauphine University.
  5. repec:laf:wpaper:201102 is not listed on IDEAS
  6. Isao Kamatai, 2014. "Regional Trade Agreements with Labor Clauses: Effects on Labor Standards and Trade," Discussion papers e-13-007, Graduate School of Economics Project Center, Kyoto University.
  7. Eric Neumayer & Indra de Soysa, 2004. "Globalization and the Right to Free Association and Collective," Labor and Demography 0410006, EconWPA, revised 22 Apr 2005.
  8. H. Dehejia, Vivek & Samy, Yiagadeesen, 2008. "Labor Standards and Economic Integration in the European Union: an Empirical Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 817-847.
  9. Vivek H. Dehejia & Yiagadeesen Samy, 2007. "Trade and Labor Standards: A Review of the Theory and New Empirical Evidence," Carleton Economic Papers 07-12, Carleton University, Department of Economics.
  10. Neumayer, Eric & Soysa, Indra de, 2006. "Globalization and the Right to Free Association and Collective Bargaining: An Empirical Analysis," World Development, Elsevier, vol. 34(1), pages 31-49, January.
  11. James Dean & Vivek H. Dehejia & Elinor Johansen & Sarah Turney, 2004. "Optimal Globalization and National Welfare," Carleton Economic Papers 04-17, Carleton University, Department of Economics.
  12. Yiagadeesen Samy & Vivek H. Dehejia, 2008. "Trade and Labor Standards in the European Union: A Gravity Model Approach," Carleton Economic Papers 08-08, Carleton University, Department of Economics.
  13. Angela Akorsu, 2013. "Labour Standards Application In The Informal Economy Of Ghana: The Patterns And Pressures," Economic Annals, Faculty of Economics, University of Belgrade, vol. 58(196), pages 157-176, January â.
  14. Jean-Marie Cardebat & Alexandru Dimitrescu, 2011. "Social Responsibility of the countries and their international trade : A gravitational approach," Larefi Working Papers 1102, Larefi, Université Bordeaux 4.

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