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Are Labour Provisions in Free Trade Agreements Improving Labour Conditions?

Author

Listed:
  • Inmaculada Martinez-Zarzoso

    (Universidad Jaume I
    University of Goettingen)

  • Hendrik W. Kruse

    (University of Goettingen
    University of Orleans)

Abstract

This paper investigates the impact of labour provisions in Free Trade Agreements (FTAs) on labour market conditions in the ratifying countries. Using panel data for up to 96 countries and a time-span from 1995 to 2008, matching techniques and a difference-in-differences approach are applied to identify the effect of FTAs on labour conditions, distinguishing between those with and without labour provisions. The results show that FTAs partially improve labour conditions in the participating countries, and that there are differences in these outcomes between agreements with specific labour provisions and those without. Empirical analysis reveals that labour provisions might be a suitable instrument to ensure labour standards, but also that a ‘global race to the bottom’ may not be prevented through these provisions per-se. The correct targeting of labour provisions is highly likely to play a crucial role in the context of avoiding a race to the bottom.

Suggested Citation

  • Inmaculada Martinez-Zarzoso & Hendrik W. Kruse, 2019. "Are Labour Provisions in Free Trade Agreements Improving Labour Conditions?," Open Economies Review, Springer, vol. 30(5), pages 975-1003, November.
    • Handle: RePEc:kap:openec:v:30:y:2019:i:5:d:10.1007_s11079-019-09545-7
    DOI: 10.1007/s11079-019-09545-7
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    Cited by:

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    2. Alberto Chong & Carla Srebot, 2023. "Can Regional Trade Agreements Negatively Impact Primary Schooling?," Open Economies Review, Springer, vol. 34(2), pages 317-339, April.

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    More about this item

    Keywords

    Labour conditions; free trade agreements; Trade; Race to the bottom; Matching;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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