Monday, March 29, 2010

Sweatshops and Jobs

Chris Blattman links to a paper on the perennial question of whether anti-sweatshop campaigns lead to unemployment in developing countries (downloadable pdf of the paper can be found there). The authors conclude no.

We find that anti-sweatshop campaigns led to large real wages increases for targeted enterprises. We also examine whether higher wages led these firms to cut employment or relocate elsewhere.

The results suggest that there were some costs in terms of reduced investment, falling profits, and increased probability of closure for smaller plants, but we fail to find significant effects on employment.

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