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Labour standards, democracy and wages: some cross-country evidence

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  • Thomas I. Palley

    (U.S.-China Economic and Security Review Commission Washington, DC USA)

Abstract

The international community is divided over labour standards. Opponents claim that standards are protectionist. Proponents say they benefit developing economies by improving governance and income distribution. This paper presents evidence supporting the case for labour standards. Using cross-country data from the second half of the 1980s and the first half of the 1990s, it shows that labour standards are associated with improved governance and reduced corruption. Labour standards also improve income distribution and raise wages. The results qualify Rodrik's (1999) findings about democracy and wages. Labour standards rather than democracy cause higher wages, but democracy may still matter indirectly by promoting labour standards. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Thomas I. Palley, 2005. "Labour standards, democracy and wages: some cross-country evidence," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(7), pages 883-898.
  • Handle: RePEc:wly:jintdv:v:17:y:2005:i:7:p:883-898
    DOI: 10.1002/jid.1140
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    File URL: http://hdl.handle.net/10.1002/jid.1140
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    References listed on IDEAS

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    1. Dani Rodrik, 1999. "Democracies Pay Higher Wages," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 707-738.
    2. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 98/76, International Monetary Fund.
    3. Vito Tanzi, 1998. "Corruption Around the World; Causes, Consequences, Scope, and Cures," IMF Working Papers 98/63, International Monetary Fund.
    4. Thomas I. Palley, 2004. "The economic case for international labour standards," Cambridge Journal of Economics, Oxford University Press, vol. 28(1), pages 21-36, January.
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    Cited by:

    1. Rémi Bazillier & Nicolas Sirven, 2006. "Les normes fondamentales du travail contribuent-elles à réduire les inégalités ?," Revue Française d'Économie, Programme National Persée, vol. 21(2), pages 111-146.
    2. Vivek Soundararajan & Jill A. Brown, 2016. "Voluntary Governance Mechanisms in Global Supply Chains: Beyond CSR to a Stakeholder Utility Perspective," Journal of Business Ethics, Springer, vol. 134(1), pages 83-102, March.
    3. Günseli Berik & Yana Van Der Meulen Rodgers, 2010. "Options for enforcing labour standards: Lessons from Bangladesh And Cambodia," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(1), pages 56-85.
    4. Jayjit Roy, 2016. "Employment Protection Legislation and International Trade," Working Papers 16-06, Department of Economics, Appalachian State University.
    5. repec:dau:papers:123456789/3202 is not listed on IDEAS

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