Observations on International Labor Standards and Trade


This paper reviews the theoretical arguments for and against linking
international labor standards to trade. Based on theory alone it is difficult
to generalize about the effect of labor standards on efficiency and equity.
Some economists have argued that international labor standards are merely
disguised protectionism. An evaluation of determinants of support for
legislation that would ban imports to the U.S. of goods made with child labor
provides little support for the prevailing political economy view. In
particular, Congressmen representing districts with relatively many unskilled
workers, who are most likely to compete with child labor, are less likely to
support a ban on imports made with child labor. Another finding is that the
prevalence of child labor declines sharply with national income. Lastly, an
analysis of compulsory schooling laws, which are often suggested as an
alternative to prohibiting child labor, finds a tremendous amount of
noncompliance in developing nations.

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Annual World Bank Conference on Development Economics, 1996 (Washington, DC: The World Bank, 1996)
Working Papers