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U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America

Author

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  • Sabina Dewan
  • Lucas Ronconi

Abstract

This paper analyzes whether Free Trade Agreements (FTAs) signed between the United States and Latin American countries during the last decade produced higher enforcement of labor regulations. The paper computes before-after estimates of the effect of FTAs on labor inspections and exploits variation across countries using non-signers as a comparison group. The empirical strategy benefits from the fact that about half of Latin American countries have signed a trade agreement with the United States. Difference-in-differences estimates suggest that signing an FTA produced a 20 percent increase in the number of labor inspectors and a 60 percent increase in the number of inspections. The North American Free Trade Agreement (NAFTA), however, does not appear to have the same positive impacts on Mexico. The paper concludes with a discussion of these results.

Suggested Citation

  • Sabina Dewan & Lucas Ronconi, 2014. "U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America," IDB Publications (Working Papers) 6724, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:6724
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    File URL: http://publications.iadb.org/bitstream/handle/11319/6724/U.S.%20Free%20Trade%20Agreements%20and%20Enforcement%20of%20Labor%20Law%20in%20Latin%20America.pdf?sequence=1
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    Cited by:

    1. International Organisation, 2017. "Handbook on Assessment of Labour Provisons in Trade and Investment Arrangements," Working Papers id:11929, eSocialSciences.

    More about this item

    Keywords

    Labor Policy; Trade Agreements; Social Security; Labor inspectors; Free trade agreements; Labor inspections; Latin America; Labor regulations; Labor law; Trade; Enforcement; Labor; Labor provisions;

    JEL classification:

    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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