Trade and the distributional politics of international labour standards
This paper constructs a simple general equilibrium model of the trade and distributional effects of spreading advanced country international labour standards to developing countries. Labour standards (including minimum safety requirements, prohibition of prison and child labour, and rights to unionise) are represented as a floor to the cost of employing labour. The model shows how the spread of standards affects the terms of trade and pattern of international specialisation, and can shift unskilled unemployment from advanced to developing countries, redistribute income among groups of factor owners in different countries. Political support for labour standards is predicted to come from a coalition of advanced country unskilled workers with insecure jobs and the secure unskilled in developing countries. Opposition is predicted from owners of other factors. Overall country lobbying positions in international forums will depend on the relative strengths of the groups within the country.
|Date of creation:||2005|
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- Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2001.
"Labor Standards: Where Do They Belong on the International Trade Agenda?,"
Discussion Papers Series, Department of Economics, Tufts University
0113, Department of Economics, Tufts University.
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- Kimberly Ann Elliott & Richard B. Freeman, 2003. "Can Labor Standards Improve under Globalization?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 338, 03.
- 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.
- Richard A. Brecher, 1974. "Minimum Wage Rates and the Pure Theory of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 88(1), pages 98-116.
- Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
- Alireza Naghavi, 2003. "Asymmetric labor markets and the location of firms: Are multinationals attracted to weak labor standards?," Working Papers 200323, School of Economics, University College Dublin.
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