does globalization increase child labor abstract there is no empirical evidence that trade exposure per se increases child labor as trade theory and household economics lead us to expect the crosscountry evidence seems to indicate that trade reduces or at worst has no significant effect on child labor consistently with the theory a comparatively well educated labor force and active social policies appear to be conducive to a reduction in child labor for countries with a largely uneducated workforce the problem is not so much globalization as not being allowed to take part in it

social accountability 8000 standard certification analysis of worldwide diffusion abstract this study analyzes the worldwide diffusion of the social accountability 8000 standard certification in sixty five countries and sixty six activity sectors from 1999 to 2011 the logistic curve model is used to assess the current situation on both a global scale and a local scale additionally instability and concentration indices are used to analyze whether the diffusion process developed in a homogeneous manner across countries and economic sectors the results i increase the understanding of sa8000 s diffusion ii provide an exploratory descriptive analysis of the current sa8000 diffusion worldwide in both macro and microanalyses compared with other standards and iii identify future trends in sa8000 diffusion concluding that currently sa8000 follows a similar pattern than other standards and in consequence a growing trend is expected in next years these findings suggest some challenges and opportunities the standard must be more flexible to accommodate the differing perspectives of cultures increase the dialogue with stakeholders and include more small companies from developing countries

the economics of child labor if child labor as a mass phenomenon occurs not because of parental selfishness but because of the parents concern for the household s survival the popular argument for banning child labor loses much of its force however this assumption about parental decision making coupled with the assumption of substitutability in production between child and adult labor could result in multiple equilibria in the labor market with one equilibrium where children work and another where adult wage is high and children do not work the paper establishes this result and discusses its policy implications copyright 1998 by american economic association

zombie lending and depressed restructuring in japan this paper explores the role that misdirected bank lending played in prolonging the japanese macroeconomic stagnation that began in the early 1990s the investigation focuses on the wide spread practice of japanese banks of continuing to lend to otherwise insolvent firms we docu ment the prevalence of this forbearance lending and show its distorting effects on healthy firms that were competing with the impaired firms the paper by hoshi 2000 was the first to call attention to this phenomenon and its ramifi

do labor standards affect comparative advantage in developing countries abstract this paper focuses on the question of whether labor standards can affect comparative advantage in unskilled labor intensive goods in developing countries and thereby influence trade flows using a heckscher ohlin framework the effects of low labor standards depend on the type of standard forced and child labor lead to an increase in the endowment of unskilled labor and hence improve comparative advantage in unskilled labor 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

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

is child labor inefficient we build a model of child labor and study its implications for welfare we assume that there is a trade off between child labor and the accumulation of human capital even if parents are altruistic and child labor is socially inefficient it may arise in equilibrium because parents fail to fully internalize its negative effects this occurs when bequests are zero or when capital markets are imperfect we also study the effects of a simple ban on child labor and derive conditions under which it may be pareto improving in general equilibrium we show that the implications of child labor for fertility are ambiguous

inflation and unemployment the world economy today is vastly different from the 1930s when seymour harris the chairman of this meeting infected me with his boundless enthusiasm for economics and his steadfast confidence in its capacity for good works economics is very different too both the science and its subject have changed and for the better since world war ii but there are some notable constants unemployment and inflation still preoccupy and perplex economists statesmen journalists housewives and everyone else the connection between them is the principal domestic economic burden of presidents and prime ministers and the major area of controversy and ignorance in macroeconomics i have chosen to review economic thought on this topic on this occasion partly because of its inevitable timeliness partly because of a personal interest reaching back to my first published work in 1941

globalization and the right to free association and collective bargaining an empirical analysis summary economies that are more open to trade and foreign direct investment fdi face greater competitive pressure than closed ones globalization critics are concerned that this pressure induces countries to lower labor standards in order to remain competitive and retain or attract foreign investment defenders of globalization counter that countries that are more closely integrated into global markets are likely to have higher rather than lower standards this article tests the effect of globalization on a specific labor right which forms part of what are commonly regarded as core or fundamental labor standards employing a new measure of free association and collective bargaining rights we find that countries that are more open to trade have fewer rights violations than more closed ones this effect holds in a global sample as well as in a developing country sub sample and holds also when potential feedback effects are controlled via instrumental variable regression the extent of an economy s penetration by fdi has no statistically significant impact globalization might not be beneficial for outcome related labor standards but it is likely to promote the process related standard of a right to free association and collective bargaining

economic growth and the demand for education is there a wealth effect abstract human capital investment in developing countries is thought to be significantly constrained by household resources this paper studies the relationship between household resources and the demand for education using recent household survey data from vietnam the data cover a period 1993 1998 of exceptional income growth in vietnam during which secondary school enrollment rose substantially using consumption expenditures to measure household wealth we find a positive and significant relationship between changes in wealth and changes in the demand for education this wealth effect persists even after controlling for locality specific factors such as changes in education returns and the supply and quality of schools and for the opportunity costs of schooling

social security in a non altruistic model with uncertainty and endogenous fertility abstract the effect of social security on fertility and saving is analyzed within a nonaltruistic model of intergenerational transfers both in the absence and in the presence of a perfect capital market fertility is reduced by a budget balanced increase in social security if the individuals have a high degree of risk aversion savings are unambiguously increased by an expansion of social security while the effect of a deficit financed expansion of the social security system on saving and fertility depends on the characteristics of the policy package considered

the sa8000 social certification standard literature review and theory based research agenda social accountability 8000 sa8000 was one of the first auditable social standards aimed at promoting labor rights for workers around the world this certification is currently considered the most important in the field of corporate social responsibility csr after approximately 15 years of research on sa8000 we provide the first literature review on this topic we analyze 56 scientific papers that address key issues concerning sa8000 including the advantages of the adoption of the ethical certification and the obstacles to adoption and management and provide a comparison with iso 9001 and iso 14001 standards and with other csr standards and codes of conduct papers are coded following a deductive inductive approach and classified by year of publication publication outlet research focus methodology underpinning theory if any unit of analysis sample size industry and country building on literature findings we identify various research gaps stemming from the scarcity of empirical research and the weakness of theoretical foundations in particular we highlight the lack of evidence on the impact of organizational level factors on the adoption of the standard on the extent of the trade off if any between positive and negative outcomes of sa8000 and the failure to identify moderators of the relation between antecedents and sa8000 adoption and or between adoption and outcomes finally we propose a theory based research agenda on sa8000 for om scholars based on transaction cost economics agency and neo institutional theories and focused on three classes of relevant problems governance structure under sa8000 risk sharing between buyers and suppliers and effects on operational performance

an explanation of the international variation in the prevalence of child labour it is hypothesized that the institutional acceptability of child labor will be more prevalent when the other members of a society gain from its use therefore the cross country variation in the prevalence of child labor depends on the degree to which child labor affects the welfare of the remaining members of a society it is demonstrated theoretically that the non child labor factors gain from child labor when the economy is closed as an economy becomes more open to international trade those gains diminish and even turn negative as the size of the economy increases child labor will not exist in capital abundant countries since in them child labor makes the non child labor factors worse off it is shown empirically that the cross country prevalence of child labor falls with increases in a nation s per capita income its openness to trade and its economic size it is argued that trade sanctions as a remedy for child labor may be counter productive since an open economy reduces the benefits of child labor to the other members of a society and thereby reduces the society s incentive to allow child labor the model also demonstrates that the economic changes brought on by democracy undermine the practice of child labor

why did zombie firms recover in japan the japanese economy experienced prolonged recessions during the 1990s previous studies suggest that evergreen lending to troubled firms known as zombie firms distorted market discipline in terms of stabilising the economy and caused significant delays in its recovery however the eventual bankruptcy of zombies was rare the purpose of this study is to investigate why zombie firms recovered in japan we first extend the method of caballero et al 2008 and identify zombies from among the listed firms subsequently we investigate the nature of corporate restructuring that was effective in reviving zombie firms our multinomial logistic regressions suggest that reducing the employee strength of zombie firms and selling its fixed assets were beneficial in facilitating their recovery however corporate restructuring without accounting transparency or by discouraging incentives for managers was ineffective in addition corporate restructuring lacked effectiveness in the absence of favourable macroeconomic environment as well as substantial external financial support

governmental interventions and household behavior in a developing country anticipating the unanticipated consequences of social programs abstract estimates of the joint effects of governmental health education and family planning programs as well as sources of water on fertility child mortality and schooling are obtained from combined district level and household level data from rural india the estimates are used both to test the implications of a model of household decision making and to assess the effectiveness of the joint public provision of such services in shifting resources from increasing family size to augmenting human capital per person the results appear consistent with household optimizing behavior and suggest that reductions in the costs of medical services contraceptives and schooling and the improvement of water sources are mutually reinforcing alternatives for implementing the joint policy goals of reduced population growth and increased human capital formation

on the determinants of core labour standards the case of developing countries abstract the paper empirically analyses the determinants of the level of core labour standards in 71 developing countries the results indicate that income levels openness to trade and human capital levels are important factors explaining variations in the level of labour standards

monetary policy shocks and distressed firms stock returns evidence from the publicly traded u s firms abstract we study u s firms stock return sensitivities to monetary policy shocks over the 2001 2015 period expansionary monetary shocks disproportionately increase returns of a distressed firm which has profit substantially smaller than its interest expense and is in need of external financing

regional returns to education child labour and schooling in india abstract we offer evidence from india that higher regional returns to primary education not only increase the likelihood that boys and girls attend school but also decrease the likelihood that they work these relationships hold only for the top three quintiles of the income distribution and mostly for children in the age group 10 14 years the former result suggests that liquidity constraints may not allow poorer households to respond to the economic benefits of education policies that raise the economic benefits of education may increase human capital investments in households that do not rely on their children s incomes for survival however low schooling and high child labour will persist among credit constrained families unless these households are provided with the economic ability to respond to these benefits

credit and efficiency in centralized and decentralized economies we study a credit model where because of adverse selection unprofitable projects may nevertheless be financed indeed they may continue to be financed even when shown to be low quality if sunk costs have already been incurred we show that credit decentralization offers a way for creditors to commit not to refinance such projects thereby discouraging entrepreneurs from undertaking them initially thus decentralization provides financial discipline nevertheless we argue that it puts too high a premium on short term returns the model seems pertinent to two issues soft budget constraint problems in centralized economies and differences between anglo saxon and german japanese financing practices

child labor urban proximity and household composition using detailed survey data from nepal this paper examines the determinants of child labor with a special emphasis on urban proximity we find that children residing in or near urban centers attend school more and work less in total but are more likely to be involved in wage work or in a small business the larger the urban center the stronger the effect is urban proximity is found to reduce the workload of children and improve school attendance up to 3 h of travel time from the city in areas of commercialized agriculture located 3 to 7 h from the city children do more farm work urban proximity effects are accounted for by a combination of local labor supply and demand conditions most notably the local importance of agriculture the education level of the parents and the local wage rate child servants which represent a small proportion of all children work much harder than other children and appear particularly at risk

trade openness foreign direct investment and child labor summary the skeptics of globalization argue that increased trade openness and foreign direct investment induce developing countries to keep labor costs low for example by letting children work this article argues that there are good theoretical reasons why globalization might actually have the opposite effect we test this with various measures of child labor and provide the first analysis of foreign investment in addition to trade we present evidence that countries that are more open to trade and or have a higher stock of foreign direct investment also have a lower incidence of child labor this holds for the labor force participation rate of 10 14 year old children the secondary school nonattendance rate and a count measure of economic sectors with child labor incidence as the dependent variables globalization is associated with less not more child labor

could international labour rights play a role in us trade during its last complete business cycle from 2001 to 2007 the usa experienced unsustainably high trade deficits policymakers are considering a number of measures to avoid a recurrence of such large external imbalances one such measure is the promotion of better labour rights around the world proponents argue that higher labour standards would boost us exports by increasing income growth abroad and reduce us imports by shrinking international price differences opponents of such a policy move argue that it is disguised protectionism that will impede trade and harm living standards in the usa and abroad in this paper i combine us trade data with data on international labour standards and other relevant economic variables to study any links between labour rights abroad and us trade the results suggest that the usa would have benefited from more exports if there had been better worker rights around the world but that labour rights would not have had any measurable impact on us imports that is the promotion of better worker rights around the world could contribute to smaller external imbalances without impeding international trade flows

multi stakeholder regulation privatizing or socializing global labor standards summary this paper evaluates leading non governmental labor regulation initiatives in the united states and europe it comparatively assesses the codes of conduct and monitoring systems within these initiatives discusses their different models of regulation and proposes criteria for evaluating their effectiveness it identifies critical factors which appear to support more effective non governmental regulation such as substantive participation of local stakeholders public transparency of methods and findings and mechanisms that bring market pressures to bear on multi national corporations and simultaneously support processes of multi stakeholder problem solving within factories and global supply chains

export liberalization and household welfare the case of rice in vietnam vietnam has rapidly become one of the three largest rice exporters in the world in spite of a binding export quota this article uses a multimarket spatial equilibrium model to examine the effect of further liberalization on regional rice prices household data are then used to calculate the welfare impact of these price changes on different household groups the results suggest that although rice export liberalization would raise food prices and exacerbate regional inequality it would also increase average real income and reduce slightly the incidence and severity of poverty we explore several explanations of these apparently paradoxical results

unnatural selection perverse incentives and the misallocation of credit in japan we examine the misallocation of credit in japan associated with the perverse incentives faced by banks to provide additional credit to the weakest firms firms are more likely to receive additional bank credit if they arein poor financial condition because troubled japanese banks have an incentive to allocate credit to severely impaired borrowers in order to avoid the realization of losses on their own balance sheets this evergreening behavior is more prevalent among banks that have reported capital ratios close to the required minimum and is compounded by the incentives arising from extensive corporate affiliations

a gendered value chain approach to codes of conduct in african horticulture codes of conduct covering the employment conditions of southern producers exporting to european markets mushroomed throughout the 1990s especially in the horticulture sector linking uk and european supermarkets with export firms in africa the majority of employment in this sector is informal a significant proportion of which is female this paper explores the gender sensitivity of codes currently applied in the african export horticulture sector from an analytical perspective that combines global value chain and gendered economy approaches through an analysis of these two approaches it develops a gender pyramid which provides a framework for mapping and assessing the gender content of codes of conduct the pyramid is applied to codes that cover employment conditions in three commodity groups and countries exporting to european markets south african fruit kenyan flowers and zambian vegetables and flowers it concludes that the gender sensitivity of codes needs to be greatly enhanced if they are to adequately address employment conditions relevant to informal and especially women workers

cropping pattern mechanization child labor and fertility behavior in a farming economy rural egypt tractor and the use of mechanical irrigation is increasing in the countryside the significant policy issue is the role of government in encouraging or discouraging continued labor saving mechanization present policy substantially encourages mechanization diesel oil is available at prices considerably lower than those in many other countries village banks provide farmers with equipment loans at rates below commercial levels machinery is imported at favorable foreign exchange rates and is exempted from import duties the most telling impact of these policies has been on the rapidly growing use of tractors and irrigation pumps both of which are believed to displace labor especially that of children this article addresses the question of whether such changes have indeed had the desired effect on child employment and family size recent developments in the egyptian agricultural sector also reveal significant changes in crop patterns these favor fruit and vegeta

money illusion under test abstract we propose a test for the presence of money illusion based on subjective survey information on individual satisfaction with income using data from the german socio economic panel for the period 1993 2003 we cannot reject the null hypothesis of no money illusion

combining global and local forces the case of labor rights in cambodia summary an innovative policy experiment in cambodia links improvement of workers rights with increased orders and market access for the products of the country s garment factories the policy originated with the us cambodia textile agreement which awarded cambodia higher garment export quotas into the us market in return for improved working conditions and labor regulations it has continued even after the expiration of the global garment quota system at the end of 2004 the agreement s effectiveness has depended on the international labor organization acting as a compliance monitor and government intervention preventing some apparel producers from free riding on others improvements

workers of the less developed world unite a multilevel analysis of unionization in less developed countries past scholars of unionization have offered exemplary cross national studies of affluent democracies and case studies of less developed countries ldcs what has been lacking is cross national research on unionization across ldcs we conduct a multilevel analysis of the likelihood that a worker is unionized with the late 1990s world values surveys of 39 ldcs we propose that unionization in ldcs can be explained by the individual characteristics of workers as well as the country level factors of institutions industrialization and globalization our analyses yield several conclusions first owing to the legacy of state socialism ex communist countries have much higher unionization second our analyses show that class very effectively explains union membership across ldcs although skilled manual workers are more unionized than most educated professionals stand out for their distinctively high unionization third the debt crisis significantly undermined unionization through the institutional influence of international monetary fund imf agreements and the globalization pressure of debt service despite being the focus of much research industrialization democratization the size of the state international labour organization conventions and international trade and investment are surprisingly insignificant decomposing the sample by communist legacy signing an imf agreement is significant in ex communist countries and debt service is significant in countries without a communist legacy overall we conclude that the debt crisis has undermined unionization and class remains a powerful basis of mobilization across ldcs

a race to the bottom in labor standards an empirical investigation abstract one of the concerns over globalization is that as nations compete for investment they relax labor standards to attract firms using spatial estimation on panel data for 135 countries over 17 years we find that the labor standards in one country are positively correlated with those elsewhere i e a cut in labor standards in other countries reduces labor standards in the country in question this interdependence is more evident in labor practices i e enforcement than in labor laws further while we find evidence of competition in both developed and developing countries it is strongest among developing countries with weak standards