Do Labour Standards Affect Comparative Advantage? Evidence for Labour-intensive Goods
نویسنده
چکیده
This paper focuses on the question of whether labour standards can affect comparative advantage in unskilled-labour-intensive goods, and thereby influence trade flows. Using a Heckscher-Ohlin framework, the effects of low labour standards depend on the type of standard: Forced and child labour lead to an increase in the endowment of unskilled labour, and hence improve comparative advantage in unskilled-labour-intensive goods; the opposite occurs with discrimination against females; and with basic trade union rights, the outcome is ambiguous. The empirical results confirm the theoretical outcome, but also show that weaker union rights are associated with a stronger comparative advantage. JEL Classification: F1, F14
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