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Core labour standards and exports

Author

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  • Jean-Marc Siroën

    () (LEDa, UMR DIAL-Paris-Dauphine)

Abstract

(english) Core labour standards defined by the ILO in 1998 are universal, but applied very differently across countries. Compliance is much higher in high income countries. However, the causality between improved labour standards and economic growth remains a controversial issue. Export-led growth strategies might encourage developing countries to curb the process of standards improvement. In this way, they can raise the volume of their unskilled labour endowments (child and/or forced labour) in order to strengthen their comparative advantage over compliant countries and pursue "social dumping" strategies, which aim more directly at increasing competitiveness. We use a gravity model to assess the trade impact of curbing the level of compliance with core labour standards, distinguishing the effects on bilateral trade (geographical specialization) from the multilateral effects on all exports and imports. We show that, other things being equal, countries that meet the labour standards tend to trade more with each other, while non-compliant countries tend to trade more with compliant countries. These effects are identified mainly with respect to child labour and freedom of association. All other things being equal, countries that meet the labour standards tend to be less open than non-compliant countries, but differently depending on the standards, with a non-linear relationship for some of them. Less compliant countries, frequently the poorest ones, may simultaneously step up their trade and labour standards. For median countries, mainly the emerging countries, the level of compliance with labour standards is “optimal” from a mercantilist point of view. For the most compliant countries, the developed ones, their strict compliance with labour standards implies a trade shortfall. _________________________________ (français) Les normes de travail fondamentales définies par l'OIT en 1998 sont universelles, mais différemment appliquées dans les pays. Leur respect est beaucoup plus élevé dans les pays à haut revenu. Toutefois, la causalité entre l'amélioration des normes de travail et la croissance reste un sujet débattu. Les stratégies de croissance par les exportations pourraient encourager les pays en développement à ralentir le processus d'amélioration des normes. Ils peuvent ainsi accroître leur dotation relative en travail non qualifié (travail des enfants et/ou forcé) pour renforcer leurs avantages comparatifs par rapport aux pays qui les respectent et poursuivre des politiques dites de "dumping social" qui visent encore plus directement à accroître leur compétitivité. Nous utilisons un modèle de gravité pour évaluer l'impact du commerce sur le respect des normes fondamentales de travail en séparant les effets sur le commerce bilatéral (spécialisation géographique) des effets sur l'ouverture multilatérale. Nous montrons que, toutes choses égales par ailleurs, les pays qui respectent les normes de travail tendent à échanger davantage entre eux alors que les pays qui ne les respectent pas tendent à échanger davantage avec les pays qui les respectent. Ces effets sont particulièrement nets avec le travail des enfants et la liberté d'association. Les pays qui respectent les normes de travail tendent à être moins ouverts que les pays qui ne les respectent pas, mais avec des différences selon les normes avec une relation non linéaire pour certaines d'entre elles. Les pays qui les respectent le moins, généralement les plus pauvres, améliorent simultanément leur commerce et leurs normes. Pour les pays intermédiaires en terme de respect des normes, principalement les pays émergents, le niveau de respect des normes de travail est “optimal” d'un point de vue mercantiliste. Pour les pays les plus respectueux, ce niveau élevé de normes conduit à réduire leur commerce.

Suggested Citation

  • Jean-Marc Siroën, 2012. "Core labour standards and exports," Working Papers DT/2012/18, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201218
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    References listed on IDEAS

    as
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    Cited by:

    1. Hayakawa, Kazunobu, 2017. "Effects of labor standard on trade : evidence from U.S. imports of coffee and tobacco," IDE Discussion Papers 669, Institute of Developing Economies, Japan External Trade Organization(JETRO).

    More about this item

    Keywords

    Exports; International Trade; Labour Standards; ILO; Gravity Models.;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • J8 - Labor and Demographic Economics - - Labor Standards

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