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Can Maquila Booms Reduce Poverty? Evidence from Honduras

Author

Listed:
  • de Hoyos, Rafael E.

    (SEMS)

  • Bussolo, Maurizio

    (The World Bank)

  • Nunez, Oscar

    (The World Bank)

Abstract

This paper identifies and estimates the strength of the reduction in poverty linked to improved opportunities for women in the expanding maquila sector. A simulation exercise shows that, at a given point in time, poverty in Honduras would have been 1.5 percentage points higher had the maquila sector not existed. Of this increase in poverty, 0.35 percentage points is attributable to the wage premium paid to maquila workers, 0.1 percentage points to the wage premium received by women in the maquila sector, and 1 percentage point to employment creation. Given that female maquila workers represent only 1.1 percent of the active population in Honduras, this contribution to poverty reduction is significant.

Suggested Citation

  • de Hoyos, Rafael E. & Bussolo, Maurizio & Nunez, Oscar, 2008. "Can Maquila Booms Reduce Poverty? Evidence from Honduras," Policy Research Working Paper Series 4789, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4789
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    References listed on IDEAS

    as
    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. Nicita, Alessandro & Razzaz, Susan, 2003. "Who benefits and how much? : how gender affects welfare impacts of a booming textile industry," Policy Research Working Paper Series 3029, The World Bank.
    3. Morley, Samuel & Nakasone, Eduardo & Pineiro, Valeria, 2008. "The impact of CAFTA on employment, production, and poverty in Honduras:," IFPRI discussion papers 748, International Food Policy Research Institute (IFPRI).
    4. Jansen, Hans G.P. & Morley, Samuel & Kessler, Gloria & Pineiro, Valeria & Sánchez, Marco & Torero, Maximo, 2007. "The impact of the Central America Free Trade Agreement on the Central American textile maquila industry," IFPRI discussion papers 720, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ham, Andrés, 2018. "The Consequences of Legal Minimum Wages in Honduras," World Development, Elsevier, vol. 102(C), pages 135-157.
    2. Lopez-Acevedo, Gladys & Robertson, Raymond, 2012. "The Promise and Peril of Post-MFA Apparel Production," World Bank - Economic Premise, The World Bank, issue 84, pages 1-4, May.
    3. Calfat, Germán & Rivas, Ana, 2008. "Fragmentation, income, gender and poverty linkages: the case of the maquila industry in Guatemala," IOB Working Papers 2008.02, Universiteit Antwerpen, Institute of Development Policy (IOB).
    4. Denise Stanley, 2010. "Outmigration, Human Development and Trade: A Central American Case Study," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 11(2), pages 315-337.
    5. John Pickles, 2012. "South African horticulture: opportunities and challenges for economic and social upgrading in value chains," Global Development Institute Working Paper Series ctg-2012-13, GDI, The University of Manchester.

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    More about this item

    Keywords

    Trade liberalization; maquila; poverty; gender wage gap; Honduras;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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