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American Economic Review: Vol. 100 No. 1 (March 2010)

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Multinationals and Anti-sweatshop Activism

Article Citation

Harrison, Ann, and Jason Scorse. 2010. "Multinationals and Anti-sweatshop Activism." American Economic Review, 100(1): 247-73.

DOI: 10.1257/aer.100.1.247

Abstract

During the 1990s, anti-sweatshop activists campaigned to improve conditions for workers in developing countries. This paper analyzes the impact of anti-sweatshop campaigns in Indonesia on wages and employment. Identification is based on comparing the wage growth of workers in foreign-owned and exporting firms in targeted regions or sectors before and after the initiation of anti-sweatshop campaigns. We find the campaigns led to large real wage increases for targeted enterprises. 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. (JEL F23, J31, J81, L67, O14, O15)

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Authors

Harrison, Ann (World Bank and U CA, Berkeley)
Scorse, Jason (Monterey Institute of International Studies)

JEL Classifications

F23: Multinational Firms; International Business
J31: Wage Level and Structure; Wage Differentials
J81: Labor Standards: Working Conditions
L67: Other Consumer Nondurables
O14: Industrialization; Manufacturing and Service Industries; Choice of Technology
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration


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