trade liberalization and wage inequality abstract this paper studies empirically the link between trade liberalization and wage inequality in chile within the context of the heckscher ohlin samuelson hos model we use cointegration techniques to estimate the long run relationship between the skill premium in chile and product prices openness and factor endowments we find that the fall in the relative price of labor intensive goods helps explaining the increase in wage inequality in chile during the last two decades the increase in proportion of the labor force with college degree on the other hand tends to reduce wage inequality in chile openness measured as the volume of trade over gdp widens the wage gap between skilled and unskilled labor we offer some hypothesis on the elements that are behind this positive relationship between wage openness and inequality but no empirical work is done this area may be an interesting subject of research

upgrading in global value chains lessons from latin american clusters it has been shown that clustering helps local enterprises in industrial districts overcome growth constraints and compete in distant markets in advanced and less developed countries nevertheless recent contributions have stressed that more attention needs to be paid to external linkages and to the role played by global buyers to foster upgrading at cluster levels in this study we contribute to this debate focusing on the analysis of the relationships existing between clustering global value chains upgrading and sectoral patterns of innovation in latin america we find that sectoral specificities matter and influence the mode and the extent of upgrading in clusters integrated in global value chains

how does globalisation affect regional inequality within a developing country evidence from china developing countries are increasingly concerned about effects of globalisation on regional inequality this paper develops an empirical method for decomposing the contributions of two major driving forces of globalisation foreign trade and foreign direct investment fdi on regional inequality and applies it to china even after controlling for many other factors globalisation is still found to be an important factor contributing to the widening regional inequality the paper ends by investigating the role of factor market segmentations in aggravating the distributional effect of changing regional comparative advantages in the process of globalisation

the impacts of trade on the brazilian labor market a cge model approach abstract the paper assesses the impacts of trade liberalization on macroeconomic variables and labor market indicators in brazil the discussion comes out of an earlier debate on the role of trade liberalization in shaping labor market outcomes in the well known heckscher ohlin and stolper samuelson hos theorems to address these issues we use a computable general equilibrium cge modeling approach to model the patterns of export growth by sector and their effects on macroeconomic and labor market indicators overall our results show that trade liberalization contributes to improve economic welfare by means of greater output lower domestic prices and higher labor demand the benefits of this economic improvement tend however to be appropriated by the most skilled workers in the most trade oriented sectors contradicting the predictions of the hos theorems

industry self regulation without sanctions the chemical industry s responsible care program industry self regulation the voluntary association of firms to control their collective action has been proposed as a complement to government regulation proponents argue that the establishment of

openness and wage inequality in developing countries the latin american challenge to east asian conventional wisdom the experience of east asia in the 1960s and 1970s supports the theory that greater openness to trade tends to narrow the wage gap between skilled and unskilled workers in developing countries in latin america since the mid 1980s however increased openness has widened wage differentials this conflict of evidence is probably not the result of differences between east asia and latin america instead the conflict is probably the result of differences between the 1960s and the 1980s specifically the entry of china into the world market and perhaps the advent of new technology biased against unskilled workers

trade reform and poverty the case of mexico we use a two step computationally simple procedure to analyse the effects of mexico s s potential unilateral tariff liberalisation on real incomes first we use the cge model provided by the global trade analysis project gtap as the new price generator second we apply the price changes to mexican household data in order to assess the effects of the policy simulation on poverty and income distribution although mexico widely liberalised most of its imports by the mid 90s one salient feature is its membership in the north american free trade agreement nafta with canada and united states by choosing gtap as the price generator we are able to model the differential tariff structure even starting with a low level of tariff protection simulation results show that the impact of tariff reform on welfare will be positive in general for all expenditure deciles we find that when we assume non homothetic individual preferences trade liberalisation benefits people in the poorer deciles more than those in the richer ones

enforcing higher labor standards within developing country value chains consequences for mnes and informal actors in a dual economy the 2013 collapse of the rana plaza building in dhaka bangladesh led external stakeholders to insist on higher labor standards in apparel global value chains gvcs stakeholders now expect mnes to take full chain responsibility however the increased monitoring and enforcement costs of a large network of suppliers have been non trivial mnes instead implement a cascading compliance approach coupled with a partial re internalization elevated costs are further exacerbated in developing countries where the informal and formal sectors are linked and cost competitiveness greatly depends on this duality monitoring actors in the informal sector is difficult and few informal actors can achieve compliance gvcs have therefore reduced informal sector engagement by excluding non compliant actors and investing in greater automation by seeking to strictly enforce compliance mnes are attenuating some of the positive effects of mne investment particularly the prospects for employment creation especially among women and enterprise growth in the informal sector i discuss how these observations might inform other cross disciplinary work in development ethics and sociology finally i note implications for ib theory from the disparities between the ownership control and responsibility boundaries of the firm

resource shocks and human capital stocks brain drain or brain gain abstract based on the paradox of plenty resource abundant countries tend to be vulnerable for lower economic prosperity along with instable political institutions as well as corruption this paper sheds light on the relationship between resource abundance and the selectivity of migration first i combine a dutch disease model with a roy borjas model in order to elaborate on the relationship between resource shocks and migrant selectivity theoretically thereby i predict that resource booms give rise to brain drain effects which are mediated through distributional effects under certain conditions second i provide empirical evidence for the effect of resource shocks on migrant selectivity based on a structural equation model in order to disentangle effects on income inequality and migrant selectivity the results show that resource shocks especially oil booms strengthen brain drain effects in a sample with 116 source and 23 destination countries between 1910 and 2009

does foreign direct investment affect wage inequality an empirical investigation we use a panel of more than 100 countries for the period 1980 2002 to analyse the relationship between inward foreign direct investment fdi and wage inequality we particularly check whether this relationship is nonlinear in line with a theoretical discussion we find that the effect of fdi differs according to the level of development we depict two different patterns one for oecd developed and one for non oecd developing countries results suggest the presence of a nonlinear effect in developing countries wage inequality increases with fdi inward stock with such effect diminishing with further increases in fdi for developed countries wage inequality decreases with fdi inward stock and there is no robust evidence to show that this effect is nonlinear

time series evidence on the sources of trends in wage inequality changes in wage inequality have long been a concern of labor economists and public policymakers when the wage premium for college graduates fell during the first half of the 1970 s many researchers blamed the decline on the increase in the relative supply of college graduates when the college wage premium increased dramatically during the 1980 s researchers offered a variety of explanations such as skill biased technological change and the internationalization of the u s economy in this paper we use time series analysis to evaluate the most common explanations given for the trends in wage inequality using cointegration techniques we evaluate the link between the trends in the candidate explanatory variables and wage inequality we show that the only variable that consistently shares the same long run trend with our wage inequality series is the durablegoods trade deficit as a percentage of gdp this variable not only follows the same trend as wage inequality during most of the 1980 s but also for the period from 1949 to 1979 no other single explanation shows the same long run consistency i an analysis of trends in wage inequality

responsibility boundaries in global value chains supplier audit prioritizations and moral disengagement among swedish firms to address substandard working conditions in global value chains companies have adopted private regulatory systems governing worker rights scholars agree that without onsite factory audits this private regulation has limited impact at the point of production companies however audit only a subset of their suppliers severely restricting their private regulatory attempts despite the significance of the placement of suppliers inside or outside firms responsibility boundaries and despite scholars having called for more research into how firms prioritize what suppliers to audit few if any systematic studies have examined the topic this is problematic as the placement of firms responsibility boundaries determines what suppliers and workers are included in firms private regulatory attempts based on a study of 12 swedish firms and the theory of moral disengagement this paper starts to fill this research gap by exploring how firms responsibility boundaries are placed the paper illustrates how firms responsibility boundary placement is best described as a patchwork with firms defining and delimiting their responsibilities differently the paper also demonstrates that three supplier types i e the worst morally justified and immediate suppliers are particularly likely to be placed inside firms responsibility boundaries while a fourth type i e disregarded suppliers is likely be placed outside

trade openness and wage inequality evidence for malaysia this article examines the impact of trade openness on wage inequality in malaysia during the period 1984 1997 malaysia has operated a very open trade regime since the 1960s and has pursued aggressive import substitution and export supporting policies this development strategy is very different to that adopted in many other emerging economies where trade liberalisation has been associated with greater wage inequality the aim of the present study is to examine whether malaysia s more open approach to international trade has had a similar effect on wage inequality the results suggest in fact that this is not the case

inequality and democracy why inequality harms consolidation but does not affect democratization under what conditions do democracies emerge and consolidate recent theories suggest that inequality is among the leading determinants of both democratization and consolidation by contrast this article argues that inequality harms consolidation but has no net effect on democratization the author shows that the existing theories that link inequality to democratization suffer from serious limitations 1 they are useful only for understanding transitions from below and thus do not apply to many other transitions that is those from above 2 even for democratization from below their predictions are unlikely to hold since inequality actually has two opposite effects and 3 they ignore collective action problems which reduces their explanatory power however these objections do not affect the relationship between inequality and consolidation in particular while inequality has two opposite effects on the probability of transition to democracy it unambiguously increases the probability of transition away from democracy this article conducts the most comprehensive empirical test to date of the relationship between inequality and democracy it finds no support for the main democratization theories contrary to what they predict estimation suggests neither a monotonic negative nor an inverted u shaped relationship yet inequality increases the probability of backsliding from democracy to dictatorship

informal employment in developing countries opportunity or last resort there is an ongoing debate among researchers and policy makers whether informal sector employment is a result of competitive market forces or labor market segmentation more recently it has been argued that none of the two theories sufficiently explains informal employment but that the informal sector shows a heterogenous structure for some workers the informal sector is an attractive employment opportunity whereas for others rationed out of the formal sector the informal sector is a strategy of last resort to test the empirical relevance of this hypothesis we formulate an econometric model which allows for several unobserved segments within the informal sector and apply it to the urban labor market in cote d ivoire

multinational corporations economic and human rights impacts on developing countries a review and research agenda developing countries are attracting a significant portion of global foreign direct investments governments of such countries often compete fiercely for attracting multinational corporations mncs in the expectation of the advantages they will bring to their economies often prioritising economic goals over fundamental human rights for a long time economists have analysed the economic impacts of mncs while a parallel strand of work in political science business ethics and international law investigates the repercussions of mnc operations on human rights despite the significant relatedness and complementarities these two bodies of literature have so far poorly interacted this paper addresses this limitation and systematically analyses and integrates existing micro level empirical evidence on the economic and human rights impacts of mncs on developing countries it provides a critical analysis of what is known and highlights what we do not know about the factors that mediate the positive and or negative impacts of mnc operations on host developing countries based on a critical analysis of the literature it discusses avenues for future research in this field and sets the grounds for a new interdisciplinary research agenda on this subject

abertura comercial dotacao de fatores produtivos e a desigualdade de rendimentos no brasil 1990 1998 this work studies the empirical relations between the endowment of production factors commercial opening and personal income in the brazilian states in the period between and 1998 using given in panel it tests the hypothesis of that regions or states with bigger per

work contracts and earnings inequality the case of chile great social inequality has been one of the worrisome features of economic development in latin america this study focuses on chile one of latin america s fastest growing economies with one of the highest levels of income inequality during the 1990s using micro level data from the 1994 and 2000 encuestas de caracterizacion socio economica this article examines the role of work contracts in explaining male and female earnings and earnings inequality among wage and salary workers over the second half of the 1990s the analysis distinguishes between wage and salary work without a work contract referred to as informal work and wage and salary work with a work contract within the latter group the study further differentiates by the type of work contract held such as permanent and a variety of contingent work contracts the findings reveal that the majority of employees in informal and contingent wage and salary work arrangements earned significantly less than their permanent counterparts additiona

market based coordination of thermostatically controlled loads part ii unknown parameters and case studies this two part paper considers the coordination of a population of thermostatically controlled loads tcls with unknown parameters to achieve group objectives the problem involves designing the bidding and market clearing strategy to motivate self interested users to realize efficient energy allocation subject to a peak energy constraint the companion paper part i formulates the problem and proposes a load coordination framework using the mechanism design approach to address the unknown parameters part ii of this paper presents a joint state and parameter estimation framework based on the expectation maximization algorithm the overall framework is then validated using real world weather data and price data and is compared with other approaches in terms of aggregated load response simulation results indicate that our coordination framework can effectively improve the operational efficiency of the distribution system and reduce power congestion at key times

globalization and the gender wage gap there are several theoretical reasons why globalization will have a narrowing as well as widening effect on the gender wage gap but little is known about the actual impact except for a number of country studies the author provides a cross country study of the impact of globalization on the occupational gender wage gap based on the rarely used but most far ranging survey of wages around the world the international labour organization s october inquiry this annual survey was started in 1924 and contains a wealth of information on wages and the gender wage gap for the period 1983 99 there is information on the gender wage gap in 161 narrowly defined occupations in more than 80 countries around the world the author finds the following i the occupational gender wage gap appears to be narrowing with increases in gdp per capita ii there is a significantly narrowing impact of trade and foreign direct investment fdi net inflows on the occupational gender wage gap for low skill occupations both in poorer and richer countries and for high skill occupations in richer countries iii there is no evidence of a narrowing impact of trade but there is evidence of a widening impact of fdi net inflows on the high skill occupational gender wage gap in poorer countries iv wage setting institutions have a strong impact on the occupational gender wage gap in richer countries

economic integration across latin america evidence from labor markets 1990 2013 combining macroeconomic and microeconomic data and three indicators of international market integration this paper assesses the degree to which latin american labor markets are integrated the results suggest that relative to east asia latin american labor markets are somewhat more integrated but considerable differences across countries persist in addition the evidence indicates that the degree of labor market integration across latin american borders is significantly less than that of labor markets within mexico and within the united states in two of the three indicators these differences may suggest opportunities for efficiency gains from further labor market integration

a picture of wage inequality and the allocation of labor through a period of trade liberalization the case of brazil this paper constructs a picture of the labor market impact of trade liberalization in brazil we examine the level and dispersion of wages the skilled wage premium and employment composition before and after trade liberalization after trade reform there was a rise in the returns to college education which since the share of college workers also rose is attributable to rising demand this change did not increase overall wage dispersion because of the small share of college educated workers and because of decreasing returns to intermediate levels of education

foreign direct investment and the relative wage in a developing economy abstract this paper examines the issue of the effect of foreign direct investment on the relative wage in the context of a developing economy recognizing that competing domestic entrepreneurs are potentially skilled workers foreign investment in skilled labor intensive sectors is shown to lower the relative wage moreover a general lump sum subsidy to foreign and domestic firms is shown to lower aggregate welfare whereas a discriminatory subsidy only to foreign firms may raise welfare

the end of the opportunism vs trust debate bounded reliability as a new envelope concept in research on mne governance modern transaction cost economics tce thinking has developed into a key intellectual foundation of international business ib research but the williamsonian version has faced substantial criticism for adopting the behavioral assumption of opportunism in this paper we assess both the opportunism concept and existing alternatives such as trust within the context of ib research especially work on multinational enterprise mne governance case analyses of nine global mnes illustrate an alternative to the opportunism assumption that captures more fully the mechanisms underlying failed commitments inside the mne as a substitute for the often criticized assumption of opportunism we propose the envelope concept of bounded reliability brel an assumption that represents more accurately and more completely the reasons for failed commitments without invalidating the other critical assumption in conventional tce and internalization theory thinking namely the widely accepted envelope concept of bounded rationality brat bounded reliability as an envelope concept includes two main components within the context of global mne management opportunism as intentional deceit and benevolent preference reversal the implications for ib research of adopting the bounded reliability concept are far reaching as this concept may increase the legitimacy of comparative institutional analysis in the social sciences

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