Forced labour in manufacturing and the local industry structure: the case of Italy

Daria Denti and Simona Iammarino

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Do spatial socio-economic features influence the demand for forced labour also in places where it is illegal and socially unacceptable? This article provides an answer to this question by estimating the effect of the characteristics of the local industry structure on forced labour in manufacturing (FLM hereafter) using Italy as a case study. Conceptually, we bridge the literature on forced labour with economic geography to empirically test the effect of local industry specialization and firm size. Exploiting a novel database of geo-tagged episodes of FLM across Italian local labour market areas, we find that industry specialization and the share of micro-firms in the industry that specializes a place are key predictors for FLM. Instrumental variable estimates relying on novel data on the geography of Italian firms in 1911 show that results are robust to endogeneity threats. Findings also hold to the inclusion of potential confounding features, like the presence of migrants and institutional quality, and to spatial dependency tests. Moreover, results support the relevance of addressing the spatial dimension for a thorough understanding of FLM. Overall, the article contributes to the currently scant quantitative evidence on the micro-regional determinants of forced labour in the Global North, which is still relatively unexplored.

Keywords: forced labour in manufacturing; local labour markets; local industry specialisation; firm size (search for similar items in EconPapers)
JEL-codes: J70 J80 L10 L25 L60 R12 R23 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2025-07-22
New Economics Papers: this item is included in nep-geo
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Published in Journal of Economic Geography, 22, July, 2025. ISSN: 1468-2702

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Related works:
Working Paper: Forced labour in manufacturing and the local industry structure: the case of Italy (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:128498

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