A Race to the Bottom in Labour Standards? An Empirical Investigation

Ronald Davies and Krishna Vadlamannati ()
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Krishna Vadlamannati: University of Heidelberg

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: Among the many concerns over globalization is that as nations compete for mobile firms, they will relax labour standards as a method of lowering costs and attracting investment. Using spatial estimation on panel data for 148 developing countries over 18 years, we find that the labour standards in one country are positively correlated with the labour standards elsewhere (i.e. a cut in labour standards in other countries reduces labour standards in the country in question). This interdependence is more evident in labour practices (i.e. enforcement) than in labour laws. Further, competition is most fierce in those countries with already low standards.

Keywords: FLabour Standards; Competition for FDI; Spatial Econometrics (search for similar items in EconPapers)
JEL-codes: F23 J83 O19 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: A race to the bottom in labor standards? An empirical investigation (2013)
Working Paper: A race to the bottom in labour standards? An empirical investigation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:iis:dispap:iiisdp385

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