Globalization and the persistence of forced labor and child labor

There is child labor and forced labor in global supply chains. This fact alone does not imply that international trade and foreign direct investment lead to child and forced labor that would otherwise not exist. If we compare across countries, those that are more globalized have less child labor and modern slavery. There is a large body of research that suggests that globalization reduces child labor when it raises permanent income, but transitory shocks like spikes in global commodity prices can lead to temporary increases in child labor that can have permanent impacts on those children. There is far too little causal evidence around forced labor. There are good theoretical reasons to believe that some types of forced labor such as debt-bondage are generally diminished by globalization, but other types of forced labor, especially when parastatal organizations or migrant workers are involved, may expand with globalization.