Wage Differentials, Monopsony Labor Markets, and the Trade-Labor Standards Debate
This paper uses a simple theoretical model confined to reasonable parameters to investigate the implications of improved labor rights and benefits (i.e., standards) in the export sectors of the developing nations (the South). Given the strong opposition to a broad trade-labor linkage, it is likely that any externally imposed improved labor standards will be restricted to trade-impacted goods. That being the case, the only standards that are likely to significantly impact trade are improved union rights and living wage campaigns. The effects of improving these labor standards vary depending on whether initially there is a wage differential that the standard reduces or whether the standard creates a new differential. The degree to which an existing differential is due to monopsonistic labor markets is also important. It is found that if a standard improves worker welfare in one region, that it reduces worker welfare in the other region; thus improving labor standards effectively pits workers in the South against workers in the North. An exception to this is possible under certain monopsony situations. In what is the most realistic case, implementation of the labor standard improves the welfare of Northern workers and lowers the welfare of Southern workers. If the objective is to improve Northern workers’ welfare, a Northern tariff is a more efficient policy tool than is a higher Southern labor standard.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
When requesting a correction, please mention this item's handle: RePEc:ris:integr:0269. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.