The Effects of International Scrutiny on Manufacturing Workers: Evidence from the Rana Plaza Collapse in Bangladesh

Laurent Bossavie, Yoon Y. Cho () and Rachel Heath ()
Additional contact information
Yoon Y. Cho: World Bank
Rachel Heath: University of Washington

No 13782, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: After the tragic factory collapse of Rana Plaza in 2013, both the direct reforms and indirect responses of retailers have plausibly affected workers in the Ready Made Garment (RMG) sector in Bangladesh. These responses included a minimum wage increase, high profile but voluntary audits, and an increased reluctance to subcontract to smaller factories. This paper uses six rounds of the Labor Force Survey and adopts a synthetic control approach to evaluate the net effects of these changes on garment workers. While we find that working conditions did improve, we find evidence of adverse effects on several other outcomes for workers. In particular, while the reforms initially increased female workers' wages, their wages had fallen an estimated 20 percent three years after Rana Plaza. We also show suggestive evidence that female workers' contracts displayed a similar short-term increase and ultimate long-term decrease. Male workers, by contrast, if anything experienced only short-term adverse effects.

Keywords: garment sector; working conditions; gender; minimum wage (search for similar items in EconPapers)
JEL-codes: F16 J16 J31 J32 J81 O12 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2020-10
New Economics Papers: this item is included in nep-dev and nep-lma
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: The effects of international scrutiny on manufacturing workers: Evidence from the Rana Plaza collapse in Bangladesh (2023)
Working Paper: The Effects of International Scrutiny on Manufacturing Workers: Evidence from the Rana Plaza Collapse in Bangladesh (2019)
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