Globalization and the Quality of Asian and Non-Asian Jobs

Robert J. Flanagan and Niny Khor
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Robert J. Flanagan: Robert J. Flanagan is the Konosuke Matsushita Professor of International Labor Economics and Policy Analysis, Emeritus, at the Stanford Graduate School of Business.
Niny Khor: Niny Khor is an economist with the Asian Development Bank Resident Mission in the People's Republic of China.

Asian Development Review, 2014, vol. 31, issue 1, 163-185

Abstract: This paper assesses the impact of international trade and investment flows on the evolution of working conditions and labor rights in Asian and non-Asian countries in the late 20th and early 21st centuries. Labor conditions improved as globalization increased during this period. We find that real per capita income growth remains a powerful source of improved labor conditions, and the effect of trade on working conditions is mainly indirect through its impact on per capita gross domestic product (GDP). We find no evidence that eliminating trade barriers degrades labor conditions. We do find evidence that persistent differences in labor conditions between Asia and the rest of the world can be explained by differences in growth and international trade. Finally, we find no evidence that countries with poor labor conditions attract disproportionate flows of foreign direct investment (FDI). Instead, FDI flows seem mainly influenced by considerations of market size, investment risks, and the share of trade in GDP. After holding those influences constant, Asia receives a comparatively small share of world FDI inflows. © 2014 Asian Development Bank and Asian Development Bank Institute.

Keywords: globalization; labor conditions; foreign direct investments; Asia (search for similar items in EconPapers)
JEL-codes: F21 F66 J81 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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