Effects of labor standard on trade : evidence from U.S. imports of coffee and tobacco

This paper empirically investigates whether countries included in the “List of Goods Produced by Child Labor or Forced Labor” by the U.S. government reduce their exports to the U.S. To this end, we estimated gravity equations for trade in coffee and tobacco during 2005–2014. In contrast to previous studies in this literature, our paper controls for a “supply-side” mechanism (e.g., change in the amount of unskilled labor) by introducing exporter-year fixed effects. Furthermore, we controlled for time-invariant country-pair specific elements such as U.S. consumers’ aversion to products from a specific country. Our results yielded a robust result that countries in the list do not change the magnitude of their exports to the U.S. Several interpretations are presented.