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International Labour Standards and Product Differentiation

Michela Limardi

Revue économique, 2010, vol. 61, issue 3, 489-497

Abstract: The interaction between labor standards and international trade has assumed new importance in the last decades. We develop an incentive based-approach to assess the efficiency of trade policy instruments for the promotion of international labour standards in Southern Firms. We show that trade policy instruments may implement minimum standards if and only if the North invests in monitoring technology. A credible monitoring mechanism requires an initial investment, credible institutions and a penalty if the misbehaviour is detected.

Date: 2010
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