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U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America

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  • Dewan, Sabina
  • Ronconi, Lucas

Abstract

This paper analyzes whether Free Trade Agreements (FTAs) signed between the United States and Latin American countries during the last decade produced higher enforcement of labor regulations. The paper computes before-after estimates of the effect of FTAs on labor inspections and exploits variation across countries using non-signers as a comparison group. The empirical strategy benefits from the fact that about half of Latin American countries have signed a trade agreement with the United States. Difference-in-differences estimates suggest that signing an FTA produced a 20 percent increase in the number of labor inspectors and a 60 percent increase in the number of inspections. The North American Free Trade Agreement (NAFTA), however, does not appear to have the same positive impacts on Mexico. The paper concludes with a discussion of these results.

Suggested Citation

  • Dewan, Sabina & Ronconi, Lucas, 2014. "U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America," IDB Publications (Working Papers) 6724, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:6724
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    References listed on IDEAS

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    1. Haroon BHORAT & Ravi KANBUR & Natasha MAYET, 2012. "Minimum wage violation in South Africa," International Labour Review, International Labour Organization, vol. 151(3), pages 277-287, September.
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    Cited by:

    1. Céline Carrère & Marcelo Olarreaga & Damian Raess, 2022. "Labor clauses in trade agreements: Hidden protectionism?," The Review of International Organizations, Springer, vol. 17(3), pages 453-483, July.
    2. Robertson,Raymond, 2021. "Deep Integration in Trade Agreements : Labor Clauses, Tariffs, and Trade Flows," Policy Research Working Paper Series 9599, The World Bank.
    3. Susan Ariel Aaronson, 2017. "Governance Spillovers of Labour Provisions in Free Trade Agreements," Working Papers 2017-2, The George Washington University, Institute for International Economic Policy.
    4. International Organisation, 2017. "Handbook on Assessment of Labour Provisons in Trade and Investment Arrangements," Working Papers id:11929, eSocialSciences.
    5. Jonas AISSI & Rafael PEELS & Daniel SAMAAN, 2018. "Evaluating the effectiveness of labour provisions in trade agreements: An analytical and methodological framework," International Labour Review, International Labour Organization, vol. 157(4), pages 671-698, December.

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    More about this item

    Keywords

    Free trade agreements; Labor inspections; Labor law; Labor inspectors; Latin America; Labor regulations; Trade; Enforcement; Labor; Labor provisions;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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