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Globalization and workers in developing countries

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  • Rama, Martin

Abstract

Stories on the positive and negative effects of globalization on workers in developing countries abound. But a comprehensive picture is missing and many of the stories are ideologically charged. This paper reviews the academic literature on the subject, including several studies currently under way, and derives the implications for public policy. First, it deals with the effects of openness to trade, foreign direct investment, and financial crises on average wages. Second, it discusses the impact of exposure to world markets on the dispersion of wages by occupation, skill, and gender. Third, it describes the pattern of job destruction and job creation associated with globalization. Because these two processes are not synchronized, the fourth issue addressed is the impact on unemployment rates. Fifth, the paper reviews the labor market policies that can be used to offset the adverse effects of globalization on employment and labor earnings. Finally, it discusses how the international community could encourage developing countries to adopt sound labor market policies in the contextof globalization.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2958.

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Date of creation: 31 Jan 2003
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Handle: RePEc:wbk:wbrwps:2958

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Keywords: Labor Policies; Public Health Promotion; Banks&Banking Reform; Environmental Economics&Policies; Economic Theory&Research; Environmental Economics&Policies; Economic Theory&Research; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Banks&Banking Reform; Health Monitoring&Evaluation;

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References

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  1. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
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  3. Belser, Patrick & Rama, Martin, 2001. "State ownership and labor redundancy - estimates based on enterprise-level data from Vietnam," Policy Research Working Paper Series 2599, The World Bank.
  4. Beyer, Harald & Rojas, Patricio & Vergara, Rodrigo, 1999. "Trade liberalization and wage inequality," Journal of Development Economics, Elsevier, vol. 59(1), pages 103-123, June.
  5. Forteza, Alvaro & Rama, Martin, 2001. "Labor market"rigidity"and the success of economic reforms across more than one hundred countries," Policy Research Working Paper Series 2521, The World Bank.
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Citations

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Cited by:
  1. Nunnenkamp, Peter & Schweickert, Rainer & Wiebelt, Manfred, 2006. "Distributional effects of FDI: How the interaction of FDI and economic policy affects poor households in Bolivia," Open Access Publications from Kiel Institute for the World Economy 4251, Kiel Institute for the World Economy (IfW).
  2. Jalil, Abdul, 2012. "Modeling income inequality and openness in the framework of Kuznets curve: New evidence from China," Economic Modelling, Elsevier, vol. 29(2), pages 309-315.
  3. Rémi Bazillier & Nicolas Sirven, 2006. "Les normes fondamentales du travail contribuent-elles à réduire les inégalités ?," Cahiers de la Maison des Sciences Economiques bla06016, Université Panthéon-Sorbonne (Paris 1).
  4. Julien Gourdon, 2011. "Trade and Wage Inequality in Developing Countries: South-South Trade Matter," Working Papers halshs-00557113, HAL.
  5. Epo, Boniface Ngah & Abiala, Mireille Ambiana & Maimo, Clovis Wendji & Choub, Péguy Christophe Faha, 2010. "Globalization, Institutions, Asset Endowments and Poverty Reduction Outcomes in Africa within the Context of the Financial Crisis: Establishing a Transmission Mechanisms," MPRA Paper 20655, University Library of Munich, Germany.
  6. Irfan ul Haque, 2004. "Globalization, Neoloberalism And Labour," UNCTAD Discussion Papers 173, United Nations Conference on Trade and Development.
  7. repec:idb:brikps:72378 is not listed on IDEAS
  8. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 19(4), pages 55-121.
  9. Anderson, Edward, 2005. "Openness and inequality in developing countries: A review of theory and recent evidence," World Development, Elsevier, vol. 33(7), pages 1045-1063, July.
  10. Guerriero, Marta & Sen, Kunal, 2012. "What Determines the Share of Labour in National Income? A Cross-Country Analysis," IZA Discussion Papers 6643, Institute for the Study of Labor (IZA).
  11. Sen, Kunal, 2008. "International Trade and Manufacturing Employment Outcomes in India: A Comparative Study," Working Paper Series RP2008/87, World Institute for Development Economic Research (UNU-WIDER).
  12. Kaltani, Linda & Loayza, Norman V., 2008. "Initial conditions and the outcome of economic reform," Economics Letters, Elsevier, vol. 101(3), pages 230-233, December.
  13. Rana Ejaz Ali Khan & Nadia Bashir, 2011. "Trade Liberalization, Poverty and Inequality Nexus: A Case Study of India," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(3), pages 114-119, September.
  14. Spinesi, Luca, 2009. "Rent-seeking bureaucracies, inequality, and growth," Journal of Development Economics, Elsevier, vol. 90(2), pages 244-257, November.
  15. Gindling, T. H. & Terrell, Katherine, 2007. "Minimum Wages and the Welfare of Workers in Honduras," IZA Discussion Papers 2892, Institute for the Study of Labor (IZA).
  16. Bhanumurthy, N.R. & Mitra, Arup, 2006. "Globalization, Growth and Poverty in India," Working Paper Series RP2006/41, World Institute for Development Economic Research (UNU-WIDER).

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