Must Improved Labor Standards Hurt Accumulation in the Targeted Sector? Stylized Analysis of a Developing Economy
This paper analyzes a stylized small open economy. The analysis clas- sifies the economy into two tradable output-producing sectors: a manu- facturing sector and a (mainly tourism-related) services sector. Assuming sectoral differences based on stylized facts, we explore the impact of higher labor standards in the manufacturing sector on the long-term prospects of the economy using comparative dynamic exercises to analyze changes in output, foreign direct investment, relative prices, sectoral distribution, and accumulation. We find, in particular, that imposing higher standards across the manufacturing sector could, in the long run, shift the structure of the domestic economy in favor of that sector. JEL Categories:
|Date of creation:||Aug 2009|
|Contact details of provider:|| Postal: Thompson Hall, Amherst, MA 01003|
Web page: http://www.umass.edu/economics
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- Nguyen Hiep & Hiroshi Ohta, 2009. "Superiority of Exporters and the Causality Between Exporting and Firm Characteristics in Vietnam," Discussion Paper Series 239, Research Institute for Economics & Business Administration, Kobe University.
- David Greenaway & Richard Kneller, 2007. "Industry Differences in the Effect of Export Market Entry: Learning by Exporting?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(3), pages 416-432, October. Full references (including those not matched with items on IDEAS)
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