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Core labour standards and economic growth

  • Rémi Bazillier

    ()

    (TEAM)

The paper focuses on the impact of international core labour standards on economic growth. In a first step, we build a novel indicator, using correspondence analysis. The paper focuses on the four core labour standards recognized in the 1998 ILO Declaration on Fundamental Principles and Rights at Work. Our two models (modelling of the steady-state-per capita income and modelling of the transition of per-capita income to its steady state value) are estimated for a large panel of countries (108) and, then, only for developing countries, for the period 1960 -1996. We use the Two Stage Least Square Method, to correct for potential problems of endogeneity. For the first model, we find that countries with higher labour standards have a higher steady-state level, all things being equal. Labour standards have positive and robust effects on per-capita income both for the world and developing countries. In the second model, the effects are non-linear. The effects of labour standards are positive and significant but are stronger for countries with medium or good labour standards. Overall, a good compliance with fundamental rights of workers has a positive effect on the long-term income and long-term growth. Thus, the development of core labour standards should be one of the goals of the development strategies.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/Bla04088.pdf
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Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number bla04088.

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Length: 32 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:mse:wpsorb:bla04088
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  1. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May.
  2. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  3. Russell Davidson & James G. MacKinnon, 1999. "Artificial Regressions," Working Papers 978, Queen's University, Department of Economics.
  4. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
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  9. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
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  14. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
  15. Stern, R.M., 2000. "Labor Standards and Trade," Working Papers 457, Research Seminar in International Economics, University of Michigan.
  16. Brown, D.K. & Dearorff, A.V. & Stern, R.M., 1993. "International Labor Standards and Trade: A Theoretical Analysis," Working Papers 333, Research Seminar in International Economics, University of Michigan.
  17. Cohen, Daniel & Soto, Marcelo, 2002. "Why are Poor Countries Poor? A Message of Hope which Involves the Resolution of a Becker/Lucas Paradox," CEPR Discussion Papers 3528, C.E.P.R. Discussion Papers.
  18. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
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