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Good for the Goose, Bad for the Gander: International Labor Standards and Comparative Development

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Abstract

The international labor rights movement, led by the International Labour Organization (ILO), asserts that developing countries are currently ready for more stringent labor standards. We investigate this claim by examining the timing of labor standard adoption in highly developed countries, which were all once as poor as today’s developing countries and made the trade-off between labor standards and income in the past. Their experience therefore suggests a safe income threshold for adopting similar labor standards in the developing world. We find that every ILO-proposed labor standard is highly premature for the developing countries of Sub-Saharan Africa. Countries there are between 100 and 300 years from reaching this threshold. Similarly, we find that so-called sweatshop-intensive developing countries are between 35 and 100 years from this threshold. ILO-proposed policy is exactly backward. A substantial relaxation of labor standards is the appropriate labor policy for the developing world.

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Notes

  1. This project was conducted by Leeson and Chris Coyne through the Mercatus Center at George Mason University.

  2. When this point was brought to the advisor’s attention, he became indignant and began cursing the researchers.

  3. For a summary of the debate over international labor standards see Brown’s (2000) excellent piece. For some studies examining how labor standards affect trade see, for example, Rodrik (1996), OECD (1996), Aggarwal (1995), and Busse (2002a, b). On the effect of labor standards on issues other than trade see, for instance, Terrell and Svejnar (1989) and Heckman and Pages (2000).

  4. For a superb investigation of sweatshop labor and wages see Powell and Skarbek (2006).

  5. There is some dispute whether the 1802 Factory Act represented true factory legislation or was merely an extension of existing poor laws (Walker 1941). This argument does not change the fact that Great Britain would still be the first country to pass a major piece of labor legislation, even if this interpretation were correct, as a second Factory Act was passed in 1819.

  6. As the French economist, Jerome Blanqui, lamented this problem in the early nineteenth century: “There is only one way of accomplishing it [international labor standards] while avoiding disastrous consequences: this would be to get it adopted simultaneously by all industrial nations which compete in the foreign market” (quoted in Leary 1996: 184).

  7. Dates for child labor law adoption in the countries below are from Hobbs et al. (1999) and Nardinelli (1990).

  8. In 1841 France officially introduced restrictions on child labor; however, these restrictions were not enforceable until 1847 with the passage of additional legislation.

  9. Prussian statues of 1839 and 1853 also dealt with child labor; however, child labor restrictions did not become practically enforceable until the Industrial Labor Code of 1891.

  10. The Factory Act of 1802 formally restricted child labor, but was rarely enforced until 1833.

  11. Although Japan’s law was introduced in 1911, it was not implemented until 1916.

  12. An estimated 30% of 5 to 14 year olds in Sub-Saharan Africa overall are child laborers (Edmonds and Pavcnik 2005)—roughly the same child labor force participation rate as the U.S. experienced in 1840 when it was at about the same level of development as Sub-Saharan Africa today.

  13. In the individual breakdown, we exclude countries that had negative average annual growth rates for the period considered (1996 to 2001).

  14. In the individual breakdown, we exclude countries that had negative average annual growth rates over the 5 year period considered (1996 to 2001).

  15. In this view, the lack of enforcement for many existing labor laws in Sub-Saharan Africa is not deplorable but praiseworthy as a way for extremely poor countries to avoid trading off income for higher labor standards prematurely.

  16. The ILO database, NATLEX, comprehensively describes the labor related laws for 170 countries. See: http://www.ilo.org/dyn/natlex/natlex_browse.home.

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Acknowledgement

We thank Pete Boettke, Chris Coyne, Andrei Shleifer, Russell S. Sobel, and William Trumbull for indispensable comments and suggestions. We also thank the Earhart Foundation and the Kendrick Fund generously supporting this research.

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  1. West Virginia University, Morgantown, WV, 26506, USA

    Joshua C. Hall & Peter T. Leeson

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  1. Joshua C. Hall
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Correspondence to Peter T. Leeson.

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Hall, J.C., Leeson, P.T. Good for the Goose, Bad for the Gander: International Labor Standards and Comparative Development. J Labor Res 28, 658–676 (2007). https://doi.org/10.1007/s12122-007-9017-y

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